French oil company Total halts project with Russia's Lukoil over Western sanctions

International Business Times: 23. September 2014
By Meagan Clark

One of Total projects in Russia's North.

French oil and gas company Total said western sanctions against Russia has forced it to halt a joint venture with Russia’s Lukoil to explore shale oil in western Siberia.

The move signals that the latest sanctions against Russia over its involvement in Ukraine will hinder the Kremlin’s plan to develop its shale oil resources with imported fracking technology, which had been seen as a key driver to the next 5 to 10 years of production.

“The Lukoil joint venture is definitely stopped,” Total’s CEO Christopher de Margerie told the Financial Times late Monday. “But it hadn’t started so it doesn’t have any impact [on Total].”

The latest sanctions against Russia, announced two weeks ago by the U.S. and EU, prohibit and restrain western financing and technology to some Russian energy projects, including shale oil development. Russia has massive untapped shale oil deposits that are considered recoverable, about 75 billion barrels worth, according to the U.S. Energy Information Administration.

On Monday, Total hosted an investor day to announce plans to sell $10 billion worth of assets between next year and 2017. The company also reduced its 2017 production goal from 3 million to 2.8 million barrels of oil equivalent each day.

Total has 15 major projects producing oil, of which two-thirds are operated by the company. Total has a stake in Kazakhstan’s largest oil field, Kashagan, which has been troubled with setbacks for nearly a decade. Margerie said production would restart in the third quarter of 2016. Technical problems on the field have racked up billions of dollars in costs. 

Total's second major project in Russia, the Yamal liquified natural gas with Russia's Novatek, remains in place though targeted by sanctions. Total can raise financing from western banks but not in dollars, and China has committed to cover 60 percent of the costs, Margerie said.

Putin renames police unit after bloody KGB founder Dzerzhinsky

The Moscow Times: 23. September 2014


Russian riot policemen are seen in Moscow's southern Biryulyovo district on Oct. 13, 2013.

President Vladimir Putin signed a decree restoring the title "Dzerzhinsky Division" to an elite police unit that was previously named after the founder of the Bolshevik secret police, the Interior Ministry's internal troops press service said Monday.

Felix Dzerzhinsky founded the Cheka, a security apparatus notorious for orchestrating mass summary executions during the Russian Civil War and the Red Terror. Established in 1924, the unit bore his name from 1926 until 1994, when its name was changed to the Independent Operational Purpose Division, the press service said. The Dzerzhinsky Division ensured security at the Potsdam Conference of 1945 and the 1980 Moscow Summer Olympics. It was also dispatched to the restive regions of Nagorno-Karabakh, North Ossetia and Chechnya upon the demise of the Soviet Union.

Today the unit is tasked with maintaining public order in Moscow and the surrounding region, as well as in the North Caucasus.

 
The statue of Felix Dzerzhinsky at the Muzeon park in Moscow.

Dzerzhinsky's name and image have become a highly contentious issue in modern Russia.

Earlier this month, members of the Communist Party erected a plaster monument to Dzerzhinsky in front of the FSB's headquarters — the infamous Lubyanka — in downtown Moscow to mark the 137th anniversary of his birth.

A 15-ton sculpture of Dzerzhinsky stood in front of Lubyanka from 1958 until 1991, when it was toppled by protesters. There are periodically calls for the statue of the controversial figure to be returned, though so far they have not been successful.

Berlin will not save Kyiv at the expense of its own interests

EuroMaidan Press: 23. September 2014

The meeting in Minsk, like the previous summit in Berlin, can be analyzed on a number of planes. What draws particular attention from the geopolitical point of view is the increased political role played by Germany. The point is not only that all this happens at the expense of Poland, and it is understandable that Warsaw does not have such financial and diplomatic capabilities as Berlin. Nevertheless, it is naïve to assume that the FRG will pursue Ukraine’s strategic goals at the expense of its own interests with Russia.

The recent summit in Berlin, in which Ukrainian, Russian, French and German Ministers of Foreign Affairs participated, excluded Poland as an active player in the events in the East. It is understandable that this could have been Kremlin or even Germany’s will. Yet our media presented also a version that this had been also a decision of Petro Poroshenko, who had been afraid that Polish involvement could be used for achieving Polish geopolitical goals. So the result was a reversal of perspective – it is not Germany that reduce Poland’s role but Ukraine itself, which we have so strongly supported.

No matter how naïve that seems, it meets with a favorable response – not only due to the Russian propaganda but also incomprehensible attempts for self-limitation on the international arena. A certain role here is played by the fear of Russia and its “punishment” which prevails among a portion of the society or the fear among certain politicians of long-term consequences related to the risk of brave and independent decisions in foreign policy. What follows is the message: the only thing on which Poland should focus is efforts to bring about the deployment of NATO (or the US) forces within its territory and in the Baltic states. In other words, it ought to concentrate on confirming and establishing the status quo in Central and Eastern Europe.

This is obviously extremely dangerous. With the assumption that this goal is not achieved and Ukraine becomes an element of games between Berlin and Moscow, the role of Poland and Ukraine in the region will be reduced even more. An alliance between us will also be out of the question.

Although currently the majority of financial decisions are formally made by Angela Merkel, the European Union is more than Germany. Similarly, a strong pro-Russian lobby is present not only in the FRG, and it is not the only country where some people are afraid of confronting the Russian Federation. In practice, this means that even if Berlin supported Ukraine by theoretically giving up some of its interests (which is currently abstract), it could do so merely for the sake of image – knowing that certain undertakings will be blocked by other EU member states. This pattern is similar to the postulate of freeing Tymoshenko before the summit in Vilnius as a condition of signing the association agreement. Thus, in terms of image, Merkel would remain “a friend of Ukraine” but the latter would not benefit from that in any way. Interestingly, that would not interfere with German-Russian relations in any respect. The issues of credit lines or financial support at the EU and only German level look similarly – there might be more to all that than meets the eye, i.e. they could be granted on condition that Kyiv reaches an agreement with Moscow at all costs or simply to make Ukraine strategically dependent.

The geopolitical choice made by Ukraine that is displayed by the today’s authorities is the Western direction. It does not mean, however, that there will be automatically no complications. Germany, despite being the most powerful country in Europe, is not that strong and independent in military and strategic terms, which has been proved for instance by the recent espionage scandals. Its true power can manifest either in a close alliance with the USA, like it has been to date, or just the opposite – by reducing the American presence in Europe. The latter variant, in turn, can be pursued only… in cooperation with Kremlin. Ukraine should bear that in mind and make efforts not to become a stake or a tool in this geopolitical power play but benefit from favourable circumstances in a flexible manner as an independent entity without losing the big picture. From Kyiv it is closer to Warsaw than to Berlin, and not only Russians but also Germans do not like this.

Russia to increase budget by 2.2 times for its main propagandists, Russia Today and Dmitry Kiselyov

Informagentstvo RBK: 23. September 2014



Dmitry Kiselyov, pro-Putin propagandist became famous for threatening on state-owned national TV that Russia could turn U.S. into ‘radioactive dust’

Russia intends to increase funds for its foreign information policy. In 2015, the federal budget will allocate 41% more to Russia Today TV, while subsidiaries of Russia Today will also receive more funding, thus totalling 2.5 times more all together.

In 2015, subsidies for the autonomous non-profit organization TV Novosti (TV channel of Russia Today) will amount to 15.38 billion rubles, as approved by the government’s federal budget bill for 2015 and the planned period of 2016-2017.

This year, 11.87 billion rubles were allocated to Russia Today, whereas just a year ago, it was planned to allocate only 10.95 billion rubles. It turns out that next year (2015), government funds for the channel, which broadcasts to and targets foreign audiences, will grow by almost 30%.

Margarita Simonian, chief editor of Russia Today, announced that TV Novosti’s budget will be increased due to the launch of channels in French and German.

Subsidies for the international news agency (MIA) of Russia Today will increase even more significantly. Simonian has been chief editor and Dmitry Kiselyov General Director of the agency since December 2013. The draft budget for 2015 points to 6.48 billion rubles, while RIA Novosti, on the basis of which the new agency was created, would get 2.67 billion rubles in 2014, and in 2015 – 2.35 billion rubles. The increase amounts to 142% and 176%, respectively.

Simonian indicated that Voice of Russia (radio) and lesser subsidiaries of RIA Novosti and Voice of Russia have all been integrated into Russia Today.

Russia will add 80 new warships to Black Sea Fleet

Reuters: 23. September 2014


Russia's President Vladimir Putin (R) reviews ships of Russian Black Sea fleet during a visit to the Crimean port of Sevastopol on May 9, 2014.

Russia will increase its Black Sea fleet with more than 80 new warships by 2020 and will complete a second naval base for the fleet near the city of Novorossiysk by 2016, its commander said on Tuesday.

In comments made to President Vladimir Putin as he visited the port city, Vice Admiral Alexander Vitko said a second Black Sea base was needed in addition to the main base on the Crimea peninsula annexed from Ukraine because of NATO expansion.

"Eighty ships and other vessels are expected to arrive (in Novorossiysk) before 2020. The Black Sea Fleet will have 206 ships and vessels by 2020," Vitko told Putin.

"NATO ships are constantly present in the Black Sea and it plans to establish a naval base in the Black Sea," he added.

NATO has regularly conducted naval exercises in the Black Sea, especially since Russia annexed Crimea, populated mainly by ethnic Russians, in March partly from fear that Ukraine's new pro-Western authorities might try to join the Atlantic alliance.

A NATO official told Reuters in Brussels there were no alliance plans to build a Black Sea base but said it already had access to the resources of member states in the region.

"Our Black Sea allies have ports that we use from time to time but (there are) no plans to build a "NATO" base as suggested," the official said.

Three NATO members have a Black Sea coastline - Bulgaria, Romania and Turkey.

The former Soviet republic of Georgia, on the eastern shore of the Black Sea, has sought membership in the past but like Ukraine is very unlikely to be admitted any time soon due to Moscow's fierce opposition to NATO's further eastern expansion.

DEFENSE SPENDING

During NATO exercises in western Ukraine earlier this month, Russian Defense Minister Sergei Shoigu promised to boost the number of troops in Crimea.

On Tuesday, Shoigu was overseeing Russian military exercises involving 155,000 servicemen in the Far East. He told Putin in a video conference that the army's firepower and assault capabilities had increased lately as part of spending plans for the armed forces set to cost hundreds of billions of dollars.

"The firing, assault and maneuver capabilities ... have increased due to the supplies of modern weapons and equipment," Shoigu said.

Russia plans to spend 21 trillion rubles ($545 billion) by the end of the decade on refurbishing Russia's armed forces. Some of those funds will be used to improve the defense infrastructure of Crimea.

Russia has staged several military exercises this year, including near Ukraine's border, which have contributed to the tensions with the West, which sees the increased training as saber rattling amid the persistent disagreements over Ukraine.

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Currency market: 
(1 US dollar = 38.5400 Russian rouble, Russian currency is already at record low and continue to fall).