Russia 110224 Basic Political Developments

Roman Abramovich, the billionaire owner of Chelsea Football Club, and Boris Berezovksy, a fellow oligarch and foe of Vladimir Putin, are set to lock horns in a high-profile court battle.

By Rupert Neate 10:34PM GMT 23 Feb 2011

The stage was set for the eagerly anticipated public showdown between two of the world's richest men after the Court of Appeal refused to strike out Mr Berezovsky's £2bn lawsuit.

Mr Berezovsky alleges that Mr Abramovich used "threats and intimidation" to force him to sell his stake in Sibneft, a Russian oil company, and Rusal, an aluminium producer, at a fraction of their claimed value.

He claims that he sold his shares in Sibneft only because he feared that if he refused Mr Abramovich would ask Mr Putin, then Russian President, to expropriate them.

In the lawsuit, Mr Berezovsky claims Mr Abramovich agreed that he and Arkadi "Badri" Patarkatsishvili, Georgia's richest man, would own half of Sibneft, with Mr Abramovich holding the shares in trust.

Mr Abramovich denies that either Mr Berezovsky, who fled Russia in 2000 after falling out with Mr Putin and now lives in exile in Britain, or Mr Patarkatsishvili ever had any interest in the business.

Mr Abramovich claims that any payment made to Mr Berezovsky was not in return for his claimed 21.5pc stake in Sibneft but a recognition of his "political assistance and protection" during the creation of the oil company. Mr Abramovich sold Sibneft to Gazprom, the state-owned energy group, for £8.5bn in 2005.

Mr Berezovsky, who has been the subject of assassination attempts in London, was previously Mr Abramovich's mentor.

A panel of three appeal judges on Wednesday upheld a previous ruling that the case, which is scheduled to start at London's High Court later this year, must go ahead. Special security measures are likely to include sweeping the court for bombs and ensuring that it is sniper-proof.

Mr Berezovsky first boasted of his plans to sue Mr Abramovich in 2005, but it was more than two years before the claim was served.

Flanked by a group of bodyguards, Mr Berezovsky eventually personally served the writ in a Hermes luxury luggage store in Sloane Square.

"I am delighted with the Court of Appeal's decision and am looking forward to proving my case at trial," Mr Berezovsky said.

Moscow has demanded his extradition but the British government has refused and granted him political asylum in 2003.

Kremlin Sees Peril in Arab Unrest

http://www.themoscowtimes.com/news/article/kremlin-sees-peril-in-arab-unrest/431523.html
24 February 2011

By Nabi Abdullaev

In remarks more natural for his hawkish predecessor, Vladimir Putin, President Dmitry Medvedev said the latest revolts in the Arab world were instigated by outside forces that were also scheming to topple the authorities in Russia.

"Let's face the truth. They have been preparing such a scenario for us, and now they will try even harder to implement it," Medvedev said at a meeting with the country's top security officials in Vladikavkaz on Tuesday. "In any case, this scenario will not work."

Medvedev would not identify whom he meant by "they," but the finger-pointing brings back memories of the Kremlin's jittery reaction to popular uprisings that toppled entrenched regimes in Georgia, Ukraine and Kyrgyzstan in the 2000s. At the time, then-President Vladimir Putin and other senior officials publicly accused the West of meddling. Moscow had wielded strong influence in those former Soviet republics.

Medvedev, for his part, has avoided confrontational rhetoric with the West and has not delved, at least publicly, into conspiracy theories about foreign enemies plotting against Russia.

But the radical Russian opposition has started speaking of the possibility of regime change patterned after the popular uprisings that ousted longtime leaders in Tunisia and Egypt in recent weeks and sparked large street protests against the rulers of Libya and, to a lesser extent, Bahrain, Iran and Yemen.

Much of the Russian discussion has taken place on social media web sites like LiveJournal and Facebook, while Facebook and Twitter are believed to have served as a powerful mobilizing tool for protesters in North Africa, especially in Egypt.

Deputy Prime Minister Igor Sechin this week publicly named Google as a force behind the regime change in Egypt.

"One should examine closer the events in Egypt," Sechin said in an interview with The Wall Street Journal published Tuesday, "to look into what high-profile Google managers had been doing in Egypt, what kind of manipulations with the people's energy had taken place there."

Sechin was apparently referring to Wael Ghonim, an Internet activist and senior Google manager who energized protesters through Facebook and live public speeches.

But the U.S. State Department also created a minor stir last week by initiating Twitter services in Arabic and Farsi, explaining in official statements that it recognizes the role of the social media in these parts of the world.

While social media is popular in Russia, the likelihood of an uprising similar to those in Egypt and Tunisia is next to impossible because of an absence of a widely shared ideological platform for a protest, political analysts said. The reason, several analysts in Russia and abroad said in interviews, is because the Russian Orthodox Church is closely aligned with the secular authorities, Putin's government conducts social policies that effectively pacify the impoverished, and the remaining fragments of the political opposition are scarce, divided and not supported by a meaningful proportion of the population.

Meanwhile, one of the country's most prominent experts on the Arab world, former Prime Minister Yevgeny Primakov, played down the notion that the United States might have played a role in the North African unrest. "The factor of an outside provocation should be completely ruled out," he said on Russia Today television this week.

Primakov said he was in Washington during the Egyptian turmoil and had met many former and current U.S. diplomats.

"I am firmly confident that the scope that these developments reached in Egypt provided a true shock for the Americans," he said.

Medvedev's warning about threatening outside forces suggests that the Russian ruling elite has a poor grasp of the country's political reality and genuinely fears an Arab-style uprising, said Andrei Soldatov, an analyst with the Agentura think tank.

"Also, Medvedev positions himself as the biggest Internet expert among the ruling elite, and he believes in the capacity of social media to mobilize the masses," he said.

Adding to the Kremlin's worries is the message conveyed by the State Department that it is possible to kick off a revolution with the help of Twitter even if a country has a weak or nonexistent opposition, Soldatov said.

Medvedev's remarks may be the result of his closer involvement with senior security officials following a recent series of terrorist attacks, and he has been influenced by their mindset rich with conspiracy theories, said Alexei Mukhin, head of the Center for Political Information, a Moscow think tank.

"It looks like Putin has convinced Medvedev that Americans are not friends and he had better think twice before accepting a new iPhone from them," he said, referring to a gift given by Apple CEO Steve Jobs in June 2010. Medvedev was visiting the United States as part of his and President Barack Obama's effort to "reset" relations between the two countries after they sank to a Cold War low during Putin's second presidential term.

Separately, Medvedev suggested during the meeting in Vladikavkaz that the letter of the law could be ignored — comments that appeared at odds with his background and public posture as a trained lawyer and legal expert.

Speaking about an initiative to move criminal trials and the pretrial custody of suspects in the North Caucasus outside their native republics in order to undercut any influence on judges and juries, Medvedev said: "I believe in this situation we can also allow ourselves to walk away from the canons of the criminal and procedural laws. Stop considering this a sacred cow."

The law now requires that suspects are kept in custody and tried at the place where they live or allegedly committed the crime.

"If this obstructs our life and prevents us from meting out justice effectively, let's do it. … People will understand us," Medvedev said in comments posted on the Kremlin web site.

Lucky Strike

Social Unrest in North Africa May Allow Russia to Redefine Itself as a More Stable Supplier of Energy for the European Community

http://russiaprofile.org/international/32878.html

By Andrew Roth Russia Profile 02/24/2011

In particular Europe looks to North Africa to provide natural gas for the region, and disruptions in service to the European continent would mean turning back to their primary supplier, Russia, with whom they have had a rocky history. “The Europeans, when they look to Russia, are kind of at Russia’s mercy and some have had their supplies cut off when they were unable to negotiate terms acceptable to both sides,” said Dianne Sutherland, chief editor and publisher of the Cairo-based Petroleum Africa Magazine. “That creates a real problem for them – Russia has an abundance of gas, and can continue supplying Europe, but that’s why the European Oil and Gas companies have looked to North Africa as an alternate source of gas supplies. And the Europeans make a much better deal there, with more favorable terms, and they’re heavily invested in the infrastructure, which gets it over to European nations, whether by pipeline or by LNG [tankers].”

Naturally the spread of opposition movements to other oil and gas producing countries in the region will determine the extent to which Russia’s role as a key producer will be redefined. Currently the Russian companies Tatneft and Gazprom both have stakes in Libya, but they might lose a preferred position with Qaddafi’s anti-Western regime should he be deposed. Nonetheless, any deep cut in production would be far more harmful to European companies, which are heavily invested in the region, than to Russian companies, which have extensive resources outside of the region and would be in a position to take advantage of the loss of supply to Europe.

Higher prices on oil and gas may also offer Russia new opportunities to reinvest extra resources into exploration, which has not been a priority recently, said Pat Szymczak, chief editor and publisher of Oil&Gas Eurasia. “The main thing is that this is an opportunity for Russia to show itself as a preferred partner for Europe, but the issue is always supply. But with oil prices high and still increasing, that increases the ability of the Russian companies to reinvest in exploration and open new fields for production. The state budget was set around $75 prices, and that’s up around $100 now, so Russia may have enough money to be able to fill their end of the pipeline.”

Further exploration and development, however, will probably require foreign companies to provide technological assistance, and there are some factors that may dissuade foreign investment in Russia. Western companies that can play an integral role in developing infrastructure elsewhere are often forced to play a more limited role in development in Russia. Furthermore, Western views on investment in the Russian oil and gas market have been negatively influenced by some scandals in past years, including the TNK-BP corporate governance dispute in 2008 and the government appropriation of the Yukos oil company, following Mikahil Khodorkovsky’s arrest in 2003. Decisions to invest will take into account the possible risks and rewards.

On the other hand, such scandals have been sensationalized, said Szymczak, and oil companies should recognize that internal politics – and not corruption – were key factors in those cases. “People talk about Khodorkovsky, but the whole issue was political – I consider what happened to be a domestic Russian issue, a family feud. He took on the Kremlin and they showed him their fist. You take the case with BP-TNK. I think that was misrepresented in the Western press. Again it was a family feud, and an internal shareholder’s fight. It had nothing to do with anyone being anti-foreign or anti-business. Overall, oil companies all operate in far more dangerous and risky places than Russia, like West Africa, where workers have to worry about attacks and kidnappings, and that kind of risk just isn’t evident in Siberia.”