25 Nov 2009 10:30

Moscow press review for November 25, 2009

MOSCOW. November 25(Interfax) - The following is a digest of Moscow newspapers published on November 25. Interfax does not accept liability for information in these stories.


Gazprom will be unable to increase its gas production to the 2008 level within the next three years. However, the gas monopoly expects the gas prices to grow, which should enable it to increase its investment program to $50 billion by 2011 ('Gazprom's Three Years').

The Federal Tariff Service (FTS) has announced growth in tariffs for electricity producers in 2010. The average growth will be 3.6% compared to 18.1% a year ago. The prices of private wholesale generating companies (OGK) will grow by 5% and those of territorial generating companies (TGK) by 9.2%. The prices of the state-own companies, i.e. RusHydro and Energoatom, will go down by 6.4% and 2.2% respectively, FST spokesperson Anna Martynova told Vedomosti following an FST board meeting ('No Indulgence', see also Kommersant, page 11, 'Energy Companies Tariff-Demoted').

Gazprom and Naftogaz have followed the Russian and Ukrainian prime ministers' instructions by reaching an agreement on reducing Russian gas supplies to Ukraine in 2010. A contract for 2009-2019 that the two companies signed last winter envisioned that Naftogaz was to buy 41.6 billion cubic meters of gas in 2010, and now this amount has been reduced to 33.75 billion cubic meters, as Gazprom said in a press release, which a Naftogaz spokesperson confirmed. Gazprom expects the gas price for Ukraine to average $286 per 1,000 cubic meters in 2010 against $223 in 2009, two sources close to the gas monopoly said ('Gas on Demand', see also Kommersant, page 8, 'Gazprom Votes for Yulia Tymoshenko').

The Russian economy's recovery slowed down in October, the Economic Development Ministry reported. GDP's yearly decline accelerated to 8.1% in October from 7.8% in September, the ministry said. In the first ten months, the economy lost 9.6%. Monthly growth that has been recorded since June, without the seasonal and calendar factors taken into account, slowed down significantly to 0.3% from 0.8% in September. Government officials are of the view that there are no reasons for panic and explain the reasons for these trends by a temporary slump in the processing industry. Experts, however, point out that no changes for the better are visible, as consumer demand is low and crediting mechanisms are not working properly ('GDP Going Bust to Turbine').


Gazprom has endorsed its investment program, which is now to be considered by the government. Compared to 2009, the monopoly's investments will grow by 5.4% to 802.4 billion rubles. Capital investments, which were significantly reduced in 2009, will grow most of all in 2010 - by 37%. However, Gazprom's financial plan and budget, as usual, will be adjusted in summer, and the main factor in this process will be trends in demand for gas (page 11, 'Gazprom Increasing Capital Investment').

TGK-2 is considered one of the most problematic power generating companies in Russia, and the Energy Ministry has said several times that TGK-2's strategic investor, the Sintez group, is failing to implement its investment program. In addition, the owners of the controlling stake have been in a long-standing conflict with the minority shareholders demanding that the shares be bought out. However, Sintez Executive Director Andrei Korolyov has said the group is still determined to implement the investment program if it finds it "economically justified" (page 14, 'Oligopoly in the Country').

Workers protesting against layoffs have blocked the work of one of UC Rusal's foreign assets, Aroaima Mining Company (AMC) in Guyana. UC Rusal said only one shift of workers was on strike, which has not affected the company's work on the whole. UC Rusal also said it planned to reach an agreement with the protesters. Experts believe UC Rusal will accept the strikers' demands out of fears that a scandal may hamper the company's upcoming IPO (page 11, 'Guyanese Workers Want More Russian Money').

The supervisory board of X5 Retail Group, a company owning the retail chains of Pyaterochka discounters, Perekrestok supermarkets, and Karusel hypermarkets, will consider the extension of General Director Lev Khasis' four-year contract, which expires on May 1, 2010, at the next meeting. Khasis himself has not yet decided whether he will stay, and the company is looking for his possible successor in case he leaves (page 9, 'Lev Khasis Bargaining with X5').