Vedomosti: West considering closer cooperation with Russia on security issues; GZT.RU: Iran finds a way of managing without Russian missiles; Nezavisimaya Gazeta, RBC Daily: Gas OPEC tries to manipulate prices; Kommersant: Transneft to pay 25% of net profit as dividend; Vedomosti: Expats attracted to Russia by salaries and fast career opportunities.

Vedomosti: West considering closer cooperation with Russia on security issues

NATO plans to create a new consolidated missile defense system where Russia will play a key role.

Although NATO allegedly wants to deploy elements of the U.S. missile defense system in southern Europe under the pretext of consultations, analysts from the Institute for Strategic Assessments and the Russian Academy of Sciences' Institute of World Economy and International Relations (IMEMO) say proposals by NATO Secretary Anders Fogh Rasmussen could help reset relations between Russia and Europe.

Unlike the United States, Europe is more readily open to discard old fears and start building a common defensive system.

Rasmussen's statement implies that the alliance and the West as a whole are beginning to discard old phobias in strategic planning and current politics and are aspiring to closer cooperation.

In terms of defending the West and Russia from nuclear-armed and chemical-armed missiles, the potential threat emanates from Iran and North Korea who insist on flexing their muscles from time to time. Such weapons might also be used by Pakistan.

The current missile defense system is still unable to stop a hypothetical ballistic-missile strike from Iran or Pakistan.

It will take much time to build the system's new facilities in Bulgaria, Greece and Romania. Moreover, equipping warships with missile defense elements and a permanent deployment in the Aegean and Black seas will be costly.

Under this scenario, Europe finds it more economical to cooperate with Russia whose early warning radar in Gabala (leased from Azerbaijan), and Armavir, the North Caucasus Federal District, can detect missile launches from most of South and Southwest Asia. Moscow can also deploy mobile radar units along its southern borders.

Russia may have reason to fear that such cooperation is a tactical ploy, and that missile interceptors, due to be deployed in southern Europe in the coming years, could be directed against Moscow's strategic nuclear forces.

The creation of hi-tech weapons is always fraught with complicated technical problems. For instance, Russian and Western missile defense systems have different target identification systems and data exchange codes.

Although standardization is possible, it would require a high level of mutual trust preventing the use of common secrets against either party. An exchange of ideas between Russian and foreign "hi-tech" scientists and designers could expedite the development of new weapons and technical systems.

As far as the Russian Armed Forces are concerned, initial cooperation with the Western military could facilitate the introduction of state of the art control methods and an improvement in officer training standards.

In the long run, a conversion to more advanced weapons systems will demand the recruitment of skilled missile defense specialists and the reduction of conscript units. Moreover, active missile defense cooperation could facilitate Russia's integration into the European security system and the renovation of NATO.

GZT.RU: Iran finds a way of managing without Russian missiles

The Islamic Republic has presented to the world its own anti-aircraft system, which is expected to replace Russia's S-300 missiles that never reached it. Experts are confident that the Iranians are unable to independently develop a system similar to the Russian-made surface-to-air missile system, but could well have copied the HQ9 system sold to Iran by China.

Last Sunday, Tehran staged a military parade displaying new armaments. Experts took notice of a new surface-to-air missile resembling the S-300. Specialists, however, say there is nothing similar between the Russian and Iranian systems except their exterior.

"I do not know what system was shown in Tehran, but I can say with confidence that the Iranians could not have developed an S-300 copy on their own," Viktor Litovkin, executive editor of the Nezavisimoye Voennoye Obozreniye newspaper, told GZT.RU.

Even the United States, he said, cannot make such systems. "The Americans have fairly good systems, but they can't build the likes of S-300s."

"The parade organizers must have shown plywood fakes or inflatable copies of the S-300, ones used to trick aviation, or really a new Iranian air-defense system, which only looks similar to the S-300," Litovkin added. "In its day, China purchased an S-300 PMU unit from Russia," the expert said, "The Chinese stripped it down to its bare components and tried to build their own copy. But despite seven years of efforts nothing came of it."

"Of course, the Iranians could not have developed an S-300 copy on their own," says Col. Anatoly Tsyganok, head of Russia's Military Forecasting Center. Like Litovkin, he believes that China could have sold a quantity of its HQ9 systems to the Islamic Republic, but this equipment underperforms the Russian prototype. "To have an idea of what the new Iranian system is capable of, it is necessary for Tehran to test it in the presence of foreign experts," Tsyganok believes.

Fyodor Lukyanov, editor-in-chief of the Russia in Global Affairs magazine, is also inclined to believe that Beijing sold its surface-to-air systems to Tehran. "Why not? For the Chinese, their trade with Iran is pure business not mixed with any ideological undertones."

The analyst does not think the deal will have a serious international impact for China. "Beijing is now being persuaded to approve new sanctions against Iran, so the sale of surface-to-air systems will be ignored. In addition, it needs to be confirmed exactly what was shown at the parade. Perhaps it was just a mock missile," Lukyanov said.

Nezavisimaya Gazeta, RBC Daily: Gas OPEC tries to manipulate prices

Members of the Gas Exporting Countries Forum (GECF) decided not to wait for consumer demand to drive prices upward but have agreed to coordinate efforts to achieve parity between oil and gas prices. However, it appears that the countries that control 70% of the global gas reserves have conflicting interests and are therefore unable to develop a unifying policy.

Dmitry Aleksandrov, investment analysis chief at the Univer investment group, said: "They are unlikely to reach any binding agreement. Maybe they will sign another memorandum, but it will not be binding." Theoretically, GECF members could push gas prices up to suit their interests by cutting down supply (production and export). But in practice, gas producers operating with low costs will be reluctant to do so.

The gas market is certainly under pressure from shale gas news, especially with Poland which is expected to grow into a leading gas producer in Europe. Aleksandrov believes the Polish shale gas threat is largely psychological. "Intensive shale gas production, at least at a level of 10 billion cubic meters a year, will remain impracticable for another five years due to environmental restrictions and extraction efficiency. Poland will only be able to produce it at a profit if the spot market price of gas rises to a minimum of $250 per 1,000 cu m, a price that would suit Gazprom as well. Nobody will subsidize shale gas projects in Poland, he said.

The GECF cannot break market law and peg gas prices to oil again, said Mikhail Korchemkin, director of the East European Gas Analysis consultancy. The era of expensive gas is over, and any statement made by the Forum will remain just that - a statement. In a similar way, Russia has often declared support for OPEC, but increased its own exports each time the group cut production.

There are no tools for regulating gas prices, Alexander Nazarov from the Metropol brokerage said. Qatar would have to cut supplies to European spot markets, where it is currently a key player, to bring the price up to the pre-crisis level.

Mikhail Krutikhin, a partner in Moscow's RusEnergy Consulting, said members of the gas OPEC are unlikely to coordinate prices. "They cannot reach an agreement. Even if they make a noble statement, Qatar, UAE, Trinidad and Tobago, Egypt, Libya and Nigeria will still be supplying increasing amounts of liquefied gas to Europe. Gazprom is equally unlikely to cut production or exports, therefore, other producers won't do so either."

Kommersant: Transneft to pay 25% of net profit as dividend

Russia's oil pipeline monopoly Transneft is one of the few companies complying with the government's order to pay out 25% of net profit as dividends. Analysts say the company will soon get back all of this money through an additional share issue to be placed in favor of the government.

According to the federal property authority, state companies' refusal to comply with the order cost the budget 20 billion rubles ($685 million) of shortfall in budget revenue in 2009. This year, First Deputy Prime Minister Igor Shuvalov proposed using the anti-crisis dividend strategy only in emergencies "following meetings with deputy prime ministers."

Before that, only Aeroflot spent 25% of its net profit on dividend payment.

Transneft paid 18%, or 750.04 million rubles ($25.7 million), of its 2007 net profit as dividend on common stock in 2008 (135.22 ruble per ordinary share). It paid 401,857,000 rubles ($13.8 million) to the holders of its preference stock (258.45 rubles per share). Spending on the payment of 2008 dividends to preference stock holders amounted to 368.1 million rubles ($12.6 million), or 236.78 rubles per share.

Transneft's 2009 net profit calculated to Russian Accounting Standards is 3.893 billion rubles ($133.3 million), only 5.7% more than in 2008. Therefore, it is unclear why the company has decided to pay dividends in accordance with the government's order. A company spokesman said it was the shareholders' decision.

Lev Snykov from VTB Capital, VTB Group's investment business, said Transneft will spend 1.4 billion rubles ($45 million) on 2009 dividends, including 973 million rubles on common stock (175 rubles per share) and 389 million rubles on preference shares (250 rubles).

This is a relatively small dividend, which the company has been paying in the last few years, the analyst said. Six or seven years ago, Transneft paid $30 (about 900 rubles) per preference share and $15 per common share.

Snykov said that Transneft invests the bulk of its profits in major projects such as the construction of the second lines of the East Siberia - Pacific Ocean pipeline and of the Baltic Pipeline System.

Yulia Novichenkova from the financial corporation Uralsib said Transneft could spend all of its profits on investment projects, apparently expecting to reimburse its spending through an additional share issue in favor of the state, planned for the near future to finance the company's investment program.

Vedomosti: Expats attracted to Russia by salaries and fast career opportunities

According to surveys, 7% of people planning to work abroad choose Russia, with Finns, Latvians and Ukrainians accounting for the bulk of foreigners looking for opportunities here.

The most attractive job destinations are the United States, Britain and Canada, according to a survey on international labor mobility, with 66,000 responses from 35 countries conducted by The Network, the global leader in international online recruitment, in late 2009-early 2010. It suggested that 52% of respondents would like to work in the United States, 47% in Britain and 43% in Canada.

Only 7% of respondents said they wished to work in Russia, with 36% of such responses coming Finland, 20% from Latvia and 17% from Ukraine. The lowest numbers of people considering getting a job in Russia were in the Philippines and Indonesia (3% each), Ireland and Morocco (4%), South Africa, Egypt, Hungary and Malaysia (5%).

Yury Virovets, head of HeadHunter (a company of The Network chain), said many foreigners are scared off by the high cost of living in Russia and personal safety issues: "Most foreigners still believe Russia to be a wild place where one can be robbed or murdered, and nobody is protected."

"For Finnish workers, Russia means a step up on the career ladder. In developed European countries they can only count on the most unattractive positions, while in Russia they get a higher salary and better career opportunities than at home.

Ukrainians rather look to Western Europe, because those heading for Russia to work are seen as 'guest workers.' They do not feel very welcome in Russia," he added.

Natalia Kurantova, sales director at the Russian office of Kelly Services global employment agency, observed that in reality, most expats working in Russia come from the United States, Germany, France and Britain. "These countries have strong business communities in Russia," she said.

The main motive for foreigners to work in Russia is higher salaries. At least 70% of those wishing to come to Russia expect a pay rise; 58% expect fast career growth; 49% good atmosphere at work; 48% interesting goals; and 32% new learning opportunities.

Foreigners who have worked in Russia start a chain reaction, Kurantova said. They tell their colleagues and friends how they have enjoyed their time in this country. In fact, they really like it here because Russia's market economy and career opportunities are dramatically different from "the quiet lining up for a pension" they see at home.

April 20, 2010

RIA Novosti