The Nation Newspaper

Tag: Russia

  • Oil price slide, sanctions cost Russia $140b

    The falling oil price is costing Russia up to $100billion a year, while Western sanctions have hit the country by $40billion, its Finance Minister  Anton Siluanov has said.

    He made this known at an international financial and economic forum in Moscow.

    Reports suggested Russia could cut its oil production by about 300,000 barrels a day in an attempt to support the oil price.

    The Organisation of Petroleum Exporting Countries’(OPEC) members will meet in Vienna this week where falling prices will be discussed.

    Vladimir Putin has said Russia could suffer “catastrophic consequences” from sanctions, the falling oil price and the sliding rouble, while claiming they would have knock-on effects for other countries.

    “The modern world is interdependent. It’s far from guaranteed that sanctions, the steep fall in oil prices and the loss of value of the national currency will lead to negative results or catastrophic consequences only for us,” the Russian president told TASS, the official news agency, on Sunday.

    The European Union (EU) and the United States imposed sanctions on Russia following its annexation of the Crimea region in Ukraine and its alleged involvement in eastern Ukraine.

    A member of the OPEC oil cartel may decide to cut production to support prices. Brent crude was trading at $80.25 a barrel on Monday, down 11 cents, while US crude was 10 cents lower at $76.41.

    Iran, Libya and Venezuela have urged other OPEC members to support oil prices by reducing output, although Kuwait has said that a cut was unlikely.

    The oil price has been falling since the summer on abundant global supply, partly due to the US shale boom, and lower demand in Europe and Asia. Brent crude has fallen by more than a third and hit a four-year low of $76.76 a barrel on November 14.

    Daniel Bathe, of Lupus alpha Investment, said: “The market would question the credibility of OPEC and its influence on global oil markets if there were no cut.”

    Saudi Arabia, OPEC’s biggest producer and exporter, has sent mixed messages about a possible cut. Olivier Jakob, an analyst at Petromatrix, said the Saudis could be influenced by the conclusion of talks about Iran’s nuclear programme in Vienna, which are being extended until next summer.

  • Sanction-stricken Russia partners Opec

    The world’s largest crude producer, Russia, is warming up to Organisation of the Petroleum Exporting Countries (OPEC) — finally.

    Russian Energy Minister Alexander Novak called on OPEC Secretary-General Abdullah Al-Badri and other officials in Vienna.

    Although the yearly meeting between Russia, the world’s largest producer and OPEC representing exporters controlling some 40 per cent of the global oil market, was planned much in advance, the timing and the significance of the meeting was not lost upon pundits.

    Russia has been reluctant to publicly coordinate moves with other producers. And though there has been no official acknowledgement of any such possibility, yet a Reuters report quoting Russian government officials did indicate that “the talk (within the Russian energy ministry) of closer cooperation with OPEC on prices have long been there.”

    Russia has had a bumpy relationship with OPEC. In fact, Moscow has been striving to increase its markets share — at the expense of OPEC. Political developments, concerning Syria and Iran, also did not help bringing the two closer.

    But a change of heart seems in offing, as sanctions, imposed by the United States and European Union after the annexation of Ukraine in March and tightened since then over Moscow’s support to separatists, is appearing to bite.

    Russian economic growth is ebbing fast and is expected to be just 0.4pc at best this year, with recession a possibility, if the West takes more measures against Moscow.

    Russia’s currency too has fallen to a historic low against the dollar — jacking up the price Russians must pay for many imports, from vegetables to luxury goods.

    Russian budget projects that the economic fallout of the sanctions will result in a revenue shortfall of nearly two trillion rubles ($52 billion) over the next two years.

    Russian reliance on its oil exports is well known. Hydrocarbon exports revenues account for almost 50pc of its budget. Already squeezed by Western sanctions over Ukraine and balanced on the edge of recession, melting crude markets and the growing squeeze on oil revenues is adding another dimension to Russian woes.

  • Russia plans state controls in case of Internet crisis

    Russia plans state controls in case of Internet crisis

    Russia is making plans to ensure state control over the country’s internet traffic in a national emergency, Russian media report. War or an Arab Spring-style uprising would class as such an emergency.

    Plans for boosting cyber security are reported to be under discussion in Russia’s Security Council. They include a back-up in case Russia is cut off from the internet. Russia currently relies heavily on foreign hosting of websites. When asked about the special meeting a Kremlin spokesman, Dmitry Peskov, said US and European actions recently “have been marked by a fair degree of unpredictability, and we have to be ready for anything”.

    Western sanctions imposed over the Ukraine conflict now target many senior Russian officials, as well as Russia’s oil industry, arms manufacturers and state banks. Western leaders accuse Russia of destabilising Ukraine by supplying soldiers and heavy weapons to separatist forces there. Russia’s Communications Minister Nikolai Nikiforov said that “recently Russia has come up against the one-sided language of sanctions.

    “In these conditions we are working on scenarios in which our respected partners suddenly decide to cut us off from the internet.”

    In January 2011 the Egyptian state blocked internet traffic inside the country after opposition groups organised protests through social media, especially on Facebook and Twitter. Experts interviewed by Vedomosti said a Russian federal body such as Rossvyaz, in charge of communications, could take over as administrator of internet domains.  Rossvyaz would then have direct control over the country’s domains such as those ending in .ru or .rf and service providers in Russia’s regions would be subordinate to it.

    It is not clear how tighter state control over the web infrastructure in Russia would affect relations with US-based Icann, the organisation that governs internet domains internationally. Mr Nikiforov said his ministry had held exercises with the defence ministry and FSB intelligence service to prepare for a scenario in which Russia was deprived of internet connections. Keir Giles, a London-based expert on Russian cyber security, says the FSB has been given new internet surveillance powers since American whistleblower Edward Snowden exposed the scale of secret US monitoring of internet traffic. According to the news website Gazeta.ru, the Russian authorities are also considering bundling the country’s internet connections into big nodes which can be monitored more easily.

     

     

     

  • Russia,China launch gas pipeline

    Russia and China have begun the construction of a new gas pipeline linking the countries, with a ceremony in the Siberian city of Yakutsk.

    China’s CNPC has agreed to buy $400bn (£240billion) of gas from Russia’s Gazprom.

    Russia will ship 38 billion cubic metres (bcm) of gas yearly over 30 years.

    The deal will lessen Russia’s dependence on European buyers, who have imposed economic sanctions because of the crisis in Ukraine.

    The construction ceremony was attended by Russian President Vladmir Putin and Chinese Vice-Premier Zhang Gaoli.

    China will start work on the construction of its side of the pipeline in the first half of next year, Mr Zhang said.

    The first gas will be pumped from Siberia to north-east China in early 2019.

    Over the past 10 years, China has used other gas suppliers. Turkmenistan is now China’s largest foreign gas supplier. Last year, it started importing piped natural gas from Myanmar.

    China is Russia’s largest single trading partner, with bilateral trade flows of $90billion (£53billion) in 2013.

    The two neighbours aim to double the volume to $200billion in 10 years.

  • Russia tensions hit Carlsberg sales

    Sales at the Danish brewer Carlsberg have been hit by falling consumption in Russia and Ukraine.

    Russia beer volumes declined by between six per cent and seven per cent in the second quarter due to the “uncertain macroenvironment” and “weak economic development”, Carlsberg said.

    Ukrainian beer consumption dropped 10 per cent amid the crisis in Eastern Europe.

    Carlsberg warned that its yearly profits would be likely to decline as a result.

    “In Eastern Europe, our teams are doing an excellent job mitigating the impact of the current market challenges,” said Carlsberg chief executive Jorgen Buhl Rasmussen.

    “Unfortunately, we believe the Eastern European beer markets will be impacted further as consumers are facing increased challenges and this will impact the group’s profits negatively this year,” he added.

    Carlsberg’s Baltika beer brand has the largest chunk of the Russian beer market. However, its market share declined by 1.2 per cent in the quarter to 37.4 per cent, after the brewer introduced smaller pack sizes.

    In Ukraine, sales were affected by a beer tax increase of 43 per cent, Carlsberg added.

    Morten Imsgard, an analyst from Sydbank said: “The overall performance in the second quarter looks fine, but they (Carlsberg) are downgrading their guidance due to the macroeconomic uncertainty in the Eastern European region. So it is a mixed bag.”

    Russia and the West have implemented sanctions against each other over the Ukraine crisis. The West has accused Russia of supporting pro-Russian separatists in Ukraine.

    Despite the tensions, Carlsberg’s rival Heineken reported “strong brand growth” in Russia in the first half of the year.

    Its premium Heineken brand grew by more than 5% in central and eastern Europe in the period.

    Nevertheless, the Russian beer market remained “quite challenging” due to yearly tax increases, a Heineken spokesperson said. Heineken has a 12 per cent share of the Russian beer market.

    In Russia, Heineken’s group beer sales fell by 4.2 per cent in the half-year.

    “Beer market conditions in Russia remain challenging reflecting the impact of weaker economic growth, lower consumer confidence and adverse legislation,” Heineken said.

    Overall, Heineken said its sales volumes had benefitted from the effect of the World Cup.

    However, Heineken’s net profit dropped 1.3 per cent to 631million euros (£504million) in the first half.

    Profits were affected by the cost of business reorganisation in Western Europe, changes to Nigerian brewing operations, and an erosion in the value of acquisition-related assets.

     

  • Russia ‘violated nuclear 1987 missile treaty’, says U.S.

    Russia ‘violated nuclear 1987 missile treaty’, says U.S.

    The United States Government has said that Russia has violated a key arms control treaty by testing a nuclear cruise missile.

    Russia tested a ground-launched cruise missile, breaking the Intermediate-Range Nuclear Forces Treaty signed in 1987 during the Cold War.

    According to a  senior US official, who  did not provide further details on the alleged breach,  described it as “very serious”.

    The Intermediate-Range Nuclear Forces Treaty was a landmark Cold War agreement. It essentially eliminated an entire, and highly controversial, class of nuclear weapons. For that reason, it still has resonance.

    There have been questions dating back at least to 2008 over whether Russia was developing a weapon that might breach the treaty. So one issue is why Washington has decided to make its declaration now. Is it a reflection of the general deterioration in US-Russian relations, and in particular the fallout from the Ukraine crisis?

    Russia has said little. It might argue the Americans are simply wrong, that the missile falls below the range limit. But the widespread suspicion is that it does breach the limits of the treaty. Moscow might also argue the treaty has been overtaken by world events, that other countries are developing similar missiles, and – after all – the Americans pulled out of the Anti-Ballistic Missile Treaty when it suited them.

    But there is also the argument that such an iconic treaty should actually be expanded beyond the US and Russia, rather than falling into disuse. The US claims come at a time of heightened tensions between the two sides, with the US criticising Russia for its alleged involvement in the conflict in Ukraine.

    US President Barack Obama has written to Russian leader Vladimir Putin over the matter, officials say.

    This is the first time the US government has made its accusations public, though the issue has simmered for years, the BBC’s Paul Blake in Washington reports.

    The 1987 treaty is at the heart of American-Russian arms control efforts, and was signed by then-Presidents Ronald Reagan and Mikhail Gorbachev in the final years of the Cold War.

     

  • Yukos owners win $50b in 10-year fight with Russia

    Former majority owners of Yukos Oil Company has won a landmark $50 billion ruling against  Russia for the confiscation of what was once the nation’s largest oil producer and now face another lengthy legal battle to claim their award.

    The Permanent Court of Arbitration in The Hague found that Russia is liable to pay just under half of the $114 billion sought, GML Ltd., the holding company for Yukos’s main owners, said today. The decision showed the campaign against Yukos was “politically motivated,” GML head Tim Osborne said in London.

    The ruling marks a fresh headache for President Vladimir Putin, who faces intensifying U.S. and European sanctions aimed at forcing him to help end the separatist war in neighboring Ukraine, which has claimed more than 1,000 lives.

    “Russia has the money to hire the best international lawyers who won’t give up without a fight,” Dmitry Gololobov, former chief attorney for Yukos, said by e-mail. “So the Yukos affair could easily go on for another 10 years.”

    Russia will appeal the ruling in the Dutch courts, the Finance Ministry said on its website, adding that it expects a fair decision. The ministry criticized what it termed a “politically biased” judgment, saying it had “serious flaws” and describing the damages as “unprecedented.”

    Russia must pay the award by mid-January or face penalties, according to GML. The possibility for appeal in the Netherlands is limited to “technical” issues, Emmanuel Gaillard, one of GML’s lawyers, said in London.

    “It will take a long while to collect $50 billion but we didn’t go into this to get a Pyrrhic victory,” Osborne said in an interview with Bloomberg Television. “We went into it to get compensation for our shareholders.”

    The decision risks dragging Russia’s two biggest corporations by market value, oil producer OAO Rosneft (ROSN) and natural gas exporter OAO Gazprom (OGZD), into extended legal wrangling. The state-run companies may be targeted because they were beneficiaries of expropriated Yukos assets, said another GML lawyer, Yas Banifatemi. Rosneft and Gazprom both declined about three per cent in Moscow trading, before paring losses.

  • Russia derailment: 21 dead in Moscow metro crash

    Russia derailment: 21 dead in Moscow metro crash

    The death toll in Tuesday’s derailment on the Moscow metro now stands at 21, the Russian health ministry says.

    Scores were injured, some seriously, when a packed commuter train braked abruptly between stations in the west of the city in the morning rush hour.

    Some of those hurt were carried out of the tunnel on stretchers, with the most serious cases airlifted to hospital.

    The cause of the crash – one of the worst incidents ever on the metro – is reported to be a power surge.

    The train derailed between Slaviansky Boulevard and Park Pobedy (Victory Park) stations in the west of the city.

    Some 50 people were in a serious condition, the Itar-Tass news agency reported, quoting a health official.

    “The train slowed down abruptly, the lights went off, and then there was a spark of fire and smoke. We were blocked in,” one passenger told Russian TV.

    Another, quoted by Reuters news agency, said: “We were trapped and only got out by some miracle. I thought it was the end. Many people were hurt, mostly in the front carriage because the cars ran into each other.” More than 1,100 people were evacuated

    The packed commuter train was travelling from the north-west of Moscow to the city centre at the time of the crash.

    The BBC’s Artyom Liss, in Moscow, says the tunnel where crash happened was built about 10 years ago.

    Critics accuse the authorities of spending too much on extending the metro system, and not enough on maintenance, our correspondent says.

    President Vladimir Putin, visiting Brazil, has ordered a criminal investigation into the accident.

    Park Pobedy is the deepest metro station in Moscow, 84m (275ft) underground, which made the rescue operation particularly hard.

    No foreigners were among the injured, the Interfax news agency said.

    Militant attacks on Russia’s railways and transport networks have killed dozens of people in the past, but the emergencies ministry said there was no suspicion of such a cause in this case.

     

  • SOS from Nigerians on scholarship in Russia

    SIR: This is a save-our-souls call from Nigerian students in Russia under the Bilateral Education Agreement (BEA) programme of the Federal Scholarship Board. If something is not urgently done to help our situation, Nigerians should expect to see screaming headlines like Russian Government deports Nigerian Scholarship Students for begging for alms on the streets of Russia; Russia set to deport Nigerian scholarship students for working without work permits; Nigerian students starve to death in Russia; Female Nigerian students prostitute for food in Russia.

    The BEA scheme is a joint program run by the Nigerian government (through the Federal Ministry of Education) in collaboration with governments of other countries such as Russia, China, Cuba, Morocco, Algeria, Ukraine, etc. Under the scheme, outstanding students from all the states of the federation are nominated by the Nigerian government to the foreign governments. The receiving-country then places the scholars in universities and pays their tuition while the Nigerian government pays for students’ visas, flight, and a monthly allowance of US$500.

    In the last seven months, we have not received our stipends from the Federal Scholarship Board (FSB), Abuja. Not a kobo or a single cent. Having not received a single cent in the last seven months from the government that sent us abroad, how are we expected to survive? The average cost of living in most Russian cities is about US$750 monthly; in cities like St. Petersburg and Moscow, it gets as high as US$1,000. This means that the US$500 the FSB is supposed to pay us is grossly inadequate. That notwithstanding, the US$500 is never paid as at when due. The earliest we have received our stipends in the last four years is six months late. Every year, the Association of Nigerian Scholarship Students in Russia (ANSSIR) keeps writing newspaper articles as this, including letters to the House of Representatives, Senate and to the Federal Scholarship Board. Our numerous requests to increase our stipends and to pay them as at and when due has always gone unanswered. The excuse always given is that the budget has not been passed. Does it take seven months to pass the budget every year? What about the supplementary budget? Why can’t provisions be made for our stipends in the supplementary budget? Why can’t our stipends be paid monthly like Nigerian workers (such as the staff of the FSB) and students from other countries such as Botswana and Ghana?

    Nigerians need to understand that the visas issued us by the Russian government are student visas, which preclude any form of employment. This means that we are not permitted by law to work even as cleaners, waiters or waitress, not part-time, not even during the holidays. Russian immigration laws are very strict and the Russian authorities are quick to punish offenders. Earlier this year, some foreign students were deported for working at a restaurant, in addition to the owners of the restaurant being made to pay huge fines. We would have loved to work to support ourselves but we are not permitted to work.

    More worrisome is that that our yearly student visa expires in another four weeks. To renew it, we need a US$40 renewal fee. Failure to renew it 20 days before expiry could lead to deportation. Our problems still does not end there. Some of us our currently doing internship either at the hospital (medical students) or airport (aeronautical engineering students) and need money for transportation.

    We plead with the federal government to speedily come to our rescue to save us from trauma.

    • Samuel Mbakwe,

    Moscow

  • Russia warning as ‘shell hits border town’

    ussia has warned of “irreversible consequences” after a man was allegedly killed on its side of the border by a shell fired from Ukraine.

    A Foreign Ministry statement blamed Ukrainian government forces for the “provocation”.

    Ukrainian Security Council spokesman Andriy Lysenko said its forces were not firing on Russian territory.

    A rebel attack on government troops on Friday which left 19 soldiers dead has led to a spate of further clashes.

    At least four people died the following night when a suburb of the rebel-held Ukrainian city of Donetsk, Marinka, was badly damaged by rockets.

    The pro-Russian separatist rebel leadership and the government blamed each other for that attack.

    At least 12 civilians and three service personnel are reported to have been killed in other incidents since.

    The rebels, who declared independence in Donetsk and Luhansk regions in April, retreated towards the city of Donetsk last week after a government siege of their symbolic stronghold, Sloviansk.

    More than 1,000 civilians and combatants are believed to have died in the fighting since April.

    The latest alleged incident happened when a shell hit the courtyard of a residential building in a small Russian border town, also called Donetsk, early on Sunday.

    Fighting has been fierce in recent days after a Ukrainian government advance.

    A man was killed and at least one person seriously injured. This is believed to be the first time Russia has reported a fatality on its side of the border.

    Russian Deputy Foreign Minister Grigory Karasin described the reported incident as an “extremely dangerous escalation for Russian citizens on Russian territory”.

    “The conversation with the Ukrainian side on this issue will be serious and tough.” he told Russian radio.

    A foreign ministry statement warned of “irreversible consequences, the responsibility for which lies on the Ukrainian side”.Mr Lysenko described the accusations as “total nonsense”.

    “The forces of the anti-terrorist operation do not fire on the territory of a neighbouring country and they do not fire on residential areas,” he said. “We have many examples of terrorists carrying out provocative shooting, including into Russian territory, and then accusing Ukrainian forces of it.”

    The row came as Ukrainian President Petro Poroshenko announced that he would not be attending the football World Cup final in Brazil.

    He had been expected to meet his Russian counterpart Vladimir Putin there to discuss the crisis.