Russia 090818 Basic Political Developments

Deal agreed for Russian to buy German shipyard

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Deal agreed for Russian to buy German shipyard

August 17, 2009, 2:04PM ET

A former Russian energy minister is poised to take over an ailing shipbuilder in northeastern Germany, after state authorities and creditors agreed Monday with Igor Yusufov on a euro40 billion ($56 billion) deal.

The Wadan shipyard's insolvency administrator, Marc Odebrecht, said that all parties involved had agreed on the terms of a deal that still needs to be signed. The takeover foresees Yusufov founding a new company called Nordic Yards, which will then take over the Wadan production. Some 1,600 of 2,500 jobs at the yards, located in Wismar and Rostock, are to be kept.

German Chancellor Angela Merkel discussed the terms of the takeover last week in a meeting with Russian President Dmitry Medvedev and expressed confidence in the deal.

Mecklenburg-Western Pomerania governor Erwin Sellering said the chancellor's vote of confidence had been important to the state, which is providing more than euro35 billion in credit as part of the deal.

Yusufov, 53, also sits on the management board of Russian energy giant Gazprom.

Nordic Yards is to produce specialized ships, such as ice breakers and tankers for liquefied natural gas, its representative said in a statement.

Russia, Mongolia hold joint military exercises

CHITA (Siberia), August 18 (RIA Novosti) - Russia and Mongolia are holding joint tactical exercises to practice interoperability during peacekeeping operations, the press service for Russia's Siberian Military District has said.

The drills, dubbed Darkhan-2, are being held in Mongolia and involve a Russian engineer maintenance battalion numbering about 200 military personnel and 90 vehicles from the Siberian Military District, as well as a number of Mongolian military units.

"Col. Gen. Alexander Postnikov [commander of the Siberian Military District] and a group of staff officers arrived in Mongolia to inspect the deployment of the Russian troops participating in the exercise," the press service said.

The Darkhan-2 exercise started on Monday and will continue until September 15.

Last year, the two countries held a similar exercise, Darkhan-1, in the central and northern parts of Mongolia. The drills involved 250 Mongolian and 450 Russian troops, including a repair battalion from the Siberian Military District.

DIMDEX promotion in Russia

Web posted at: 8/17/2009 2:7:43

Source ::: THE PENINSULA DOHA: An official DIMDEX 2010 delegation has recently returned from a successful visit to the International Maritime Defence Show (IMDS) in St. Petersburg, Russia to promote DIMDEX 2010 to more than 300 leading Russian and international maritime exhibitors.

The DIMDEX 2010 delegation, headed by Chairman and Commander of the Qatar Emiri Naval Forces Staff Brigadier (Sea) Mohammed bin Nasser M Al Mohannadi, met with senior military commanders including Vyacheslav Dzirkaln, Deputy Director of the Russian Federal Service for Military and Technical Cooperation. Among topics discussed was the likelihood of including DIMDEX 2010 on the list of approved international maritime events for Russian companies’ participation.

Held under the auspices of the Emir H H Sheikh Hamad bin Khalifa Al Thani and the Heir Apparent H H Sheikh Tamim bin Hamad Al Thani DIMDEX 2010 is the Middle East and North Africa’s largest exhibition and conference dedicated to the Maritime Defence industry. Supported by the Qatar Armed Forces, DIMDEX 2010 is again hosted by Qatar Emiri Naval Forces in Doha from March 29 to 31.

Underlining Qatar’s growing reputation in global maritime defence circles, the DIMDEX 2010/Qatar Emiri Naval Forces delegation received a prestigious honor when they were invited to attend the IMDS VIP Delegation lunch hosted by Admiral Vladimir Vysotsky, Chief Commander of the Russian Navy.

“DIMDEX continues to build successful alliances and close business relationships across the world, and participating at IMDS allows us to continue our dialogue with key stakeholders,” said Staff Brigadier Al-Mohannadi. “Our objective is to work closely with military forces and maritime corporations to establish DIMDEX as a must-attend event on the international defence and security calendar.”

The delegation met prominent international maritime manufacturers, in particular Rosoboronexport, Rostechnologies and other leading Russian defence companies who expressed interest in visiting Doha as part of the DIMDEX 2010 Russian Pavilion.

“Visiting IMDS gave us the opportunity to influence the major industry players that DIMDEX 2010 is a crucial event in the international maritime defence calendar. Over the next 10 years more than 350 military vessels will be procured as 19 MENA countries spend $17bn on maritime defence and security technology in a region that traditionally focuses on smaller vessels for coastal defence and EEZ protection,” said Staff Brig. Al Mohannadi.

India releases $122 million for Gorshkov modification

August 16th, 2009 - 5:18 pm ICT by IANS By Gulshan Luthra

New Delhi, Aug 16 (IANS)

India has cleared an installment of $122 million to Russia to ensure that the modification work on aircraft carrier Gorshkov, also known as Vikramaditya, continues till a settlement on the final price is reached.

The payment was sanctioned earlier this month by the government following demands by Rosoboronexport, the sole Russian agency designated for importing or exporting defence equipment, according to India Strategic defence magazine.

India had paid around $600 million initially after an agreement between the two countries in 2004, according to which the old aircraft carrier was gifted as free but India was to pay $974 million to modify and upgrade it in accordance with Indian Navy’s specifications.

In 2007, however, the Russians said they had made a mistake in their calculations to repair and modify Gorshkov, and demanded another $1.2 billion. Recently, they have added still another $700 million saying that modifications, and then sea trials, would be more expensive than as considered by them earlier.

The total demand by the Russians now touches $2.9 billion, instead of $974 million, or, approximately one billion as originally contracted.

The delivery of the aircraft carrier has also been pushed from 2008 to 2012-13, although repair work on it is continuing without break at the Sevmash shipyard in northern Russia on its Arctic coast.

The Russian government had extended $250 million to the shipyard in 2008, and now the installment of $122 million being paid by India is also to ensure that there is no break in the repair work, India Strategic quoted sources as saying.

Indian naval officials have been stationed at Sevmash for the past several years to monitor the day-to-day activity and to ensure that the repair and modifications are in line with the Naval Staff Qualitative Requirements (NSQRs), the dispute over the additional monetary demands notwithstanding.

India has naturally been reluctant to meet the post-contract Russian demands, and even the Comptroller General of India (CGI) has described the deal as a mess. But the Navy needs Gorshkov as early as possible as its only existing aircraft carrier, Viraat, is on life extension and undergoing a refit to serve for another few years.

It takes nearly 8 to 10 years to acquire an aircraft carrier. Procedures within the Indian bureaucratic system require two to three years, and then a company which is ordered to build it, should take another 5 to 8 years.

Although the Indian Navy is already building one of its two aircraft carriers in design consultancy with Italy’s Fincantieri, it has no choice but to go in for Gorshkov in line with its sanctioned three-carrier planning. Ideally though, a country the size of India with 7,500 km of coastline should have at least five aircraft carriers.

A Russian defence delegation was in New Delhi in July but it refused to negotiate lower than its demand for $2.9 billion.

Discussions though will continue.

The government’s Cabinet Committee on Security (CCS) is reported to have asked the Ministry of Defence to continue the negotiations but has not acceded to the two revised Russian demands.

It may be noted that the Gorshkov deal also involves a related $740 million contract for 16 Mig 29K aircraft. That deal is going smoothly and the first four of these aircraft are likely to arrive at INS Hansa, the Indian Navy training facility in Goa, by year-end.

Ten pilots, initially trained by the US Navy for carrier landing at its Naval Air Station, Pensacola training facility, are now in Russia training on the Mig 29Ks.

Four of these Mig 29Ks are twin-seaters for training and the remaining 12 for routine operational flying.

The Navy will continue to operate the Mig 29Ks from its ground stations as all 16 of them are likely to be in India before the arrival of Gorshkov.

Chavez to visit Russia, Belarus, Libya in September

(AFP) – 2 days ago

CARACAS — Venezuelan President Hugo Chavez confirmed his plans to visit Russia, Belarus and Libya in September to bolster cooperation with these three countries.

"I should be visiting Russia, Belarus and Libya within a month," Chavez said during a political event. "This trip has been planned since the beginning of the year, but now we have much weightier reasons to step up cooperation with these countries."

Chavez has expressed serious concern at the decision of neighboring Colombia to allow the US military use of seven bases on its territory, saying it could lead to war in the region.

The Venezuelan leader, who just paid a quick visit to Cuba and met with ailing Cuban leader Fidel Castro, suggested in his speech the Colombian-US accord specifically targeted Venezuela and its "Bolivarian revolution."

"Fidel told me, 'Don't worry about us, their real target is you.'" And Fidel is right," Chavez said. "The target is the Bolivarian revolution."

Russians revealed in secret talks with Crystallex to resolve Las Cristinas gold mine dilemma in Venezuela before cash runs out completely!

VHeadline Venezuela News reports: Confidential sources close to Crystallex de Venezuela C.A. -- speaking exclusively to -- have revealed that the Toronto-based transnational mining corporation is in urgent talks with the Russians aimed at a resolution to the company's Las Cristinas gold mine dilemma in Venezuela before its available cash runs out completely next month.  Negotiations with the Russians have been held under conditions of utmost secrecy but we can reveal that Crystallex chairman & CEO Robert Fung has been talking with key executives of Russian Gazprom at various locations in France and (we understand) Moscow during an unlikely "vacation" in Northern Europe.

Crystallex' urgency to strike a deal is also exacerbated by the fact that even by their own admissions they only have cash to see them (barely) into Q4 2009 and with at least two legal cases pending, lawyers' fees are astronomical ... said to be in the order of $2 million a month and running on empty.

It had early been thought that Venezuela's National Mining Corporation would simply take over both Las Cristinas and adjacent Las Brisas del Cuyuni in one fell swoop -- and while this is still possible, it appears that Fung's last ditch efforts are designed to get rid of the Las Cristinas contract with the Venezuelan government and into the hands of an entity which is more acceptable to the Chavez government in Caracas.

The Venezuelan President is known to be seriously at odds with the management structure at Crystallex' Venezuelan subsidiary, Crystallex de Venezuela, because of links to senior ex-diplomat Enrique Tejera Paris.  Although the elderly ETP had resigned from Crystallex International's board and chairmanship of the Venezuelan subsidiary, his family ties to Crystallex' lawyers and the subsidiary's management team are too close for comfort for Chavez who believes that ETP had been ready to take on the presidency prior to the April 2002 coup d'etat which saw Dictator for a Day Pedro Carmona Estanga seize (temporary) control because ETP's limousine was stuck in traffic and could not reach the Presidential Palace in time to take advantage of fast-moving events in the coup.

In the continuing drama, the Agapov Group-owned Rusoro Mining (based in Vancouver with its own Venezuelan subsidiary in Caracas) appears to have been thwarted in its behind-the-scenes efforts to snatch Las Cristinas and Las Brisas del Cuyuni, following protracted secret negotiations with Crystallex and a massively rejected takeover bid for Gold Reserve, but it still remains as a strategic partner with the Venezuelan Guayana Corporation (CVG) gold-mining subsidiary, CVG-Minerven, and a major player in Venezuela's gold-mining future.

Russian Gazprom is already involved with Petroleos de Venezuela (PDVSA) in a massive oil exploration and development joint venture and industry experts say any move to branch into Venezuela's gold mining industry reflects Gazprom's Moscow managements aim to diversify, especially when Venezuela's gold reserves can be secured against serious investments that are required not just in Venezuela's gold industry but across a broad spectrum of heavy industries currently controlled by the Venezuelan Executive.

Russia Set To Modernize Libya's Soviet-Era Tanks
by Staff Writers
Moscow, Russia (RIA Novosti) Aug 18, 2009
Russia and Libya have signed a contract to overhaul at least 145 T-72 Russian-made battle tanks in service with the Libyan Army, a senior government official said on Monday.

Moscow and Tripoli have been involved in talks on the modernization of the T-72 tanks since 2006 as part of renewed efforts to revive bilateral military-technical cooperation.

"Work has been conducted in the Libyan direction, and we have already made headway after signing a number of contracts with the country over the past year, including on the modernization of T-72 tanks," Konstantin Biryulin, deputy head of the Federal Service for Military-Technical Cooperation, said in an interview with RIA Novosti.

The official said talks on Russian arms deliveries to Libya are underway, but refused to disclose any details of the future contracts due to their confidential nature.

"I do not want to help our competitors in their work [on the Libyan arms market]," Biryulin said.

Russia has encountered tough competition with Western nations in arms sales to Tripoli since the UN lifted sanctions against Libya in 2003, when the Libyan president announced he would halt the country's nuclear weapons program and accepted responsibility for the 1998 terrorist bombing over Lockerbie in Scotland, agreeing to pay compensation to the victims' families.

Libya was one of the largest buyers of Russian-made armaments in the second half of the 20th century. Tripoli has acquired from the Soviet Union more than 2,000 tanks, 2,000 armored infantry fighting vehicles and armored personnel carriers, about 450 self-propelled artillery pieces, as well as a number of combat aircraft and large quantities of small arms since the beginning of the 1970s.

Konstantin Makiyenko, deputy director of the Russian Center for Strategic and Technological Analysis, said last year that future Russian arms contracts with Libya could be worth up to $4 billion, and include the total overhaul of Libya's obsolete arsenal of tanks.

"In particular, over 100 T-72s require an urgent overhaul, and the same refers to the T-62, T-55 and T-54 tanks, which constitute the backbone of the Libyan Army," the analyst said.

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