SOURCE: The St. Petersburg Times
DATE: Issue #1261 (27), Tuesday, April 10, 2007
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TITLE: Russia Plans Rival GPS Technology
AUTHOR: By James Kilner
PUBLISHER: Reuters
TEXT: MOSCOW — Russia plans to launch a direct competitor to the U.S. GPS satellite navigation system next year using military technology developed in the Cold War era, project leaders said on Monday.
Drivers, hill walkers, sailors and army commanders around the world navigate using satellite technology developed by the U.S. military. Soon they will be able to switch to a Soviet-designed rival — GLONASS.
“We are planning to deliver all sorts of devices already available on GPS,” said Alexander Gurko, the chairman of M2M Telematics which manufacturers satellite navigation equipment.
GPS stands for Global Positioning System.
“From next year we will start producing a consumer product from GLONASS,” Gurko said.
He was speaking at a press briefing alongside Yury Nosenko, the deputy head of the Russian space agency Roskosmos, and other GLONASS project leaders.
Russia will spend 10 billion rubles ($385 million) this year on developing GLONASS and firing more satellites into orbit but will also be looking for private partners, Nosenko said.
The Soviet Union started work on developing GLONASS, which stands for Global Navigation Satellite System, in the mid-1970s to give its army exact bearings around the world. But the collapse of the Russian economy in the late 1990s drained funds away from GLONASS and the satellite system frayed.
Now though, it has become a favored project of Russian President  Vladimir Putin, whose seven years in power have been marked by resurgent Russian national pride alongside burgeoning oil revenues.
Since the U.S. military turned on the GPS system for the consumer market in 1993, it has become a multi-billion-dollar industry.
“Consumers don’t care whether its GPS, GLONASS or Galileo, they just want a signal,” said Yury Urchich, head of the Russian institute of space equipment engineering.
Galileo is the European Union’s satellite navigation system which it says will start beaming coordinates to customers by 2011.
GLONASS presently covers Russia and some of the surrounding countries but after the launch of more satellites this year it will spread its reach until, by 2009, the world will be fully covered by its 24 Russian satellites, the panel said.
India, which buys military equipment from Russia, has already signed a deal to jointly develop the GLONASS system.
“Of course there are problems,” Roskosmos’s Nosenko said of developing GLONASS. “Some of them have a certain history, some of them are new, but they are all being discussed candidly.”

TITLE: World’s Latest Space Tourist Blasts Off
AUTHOR: By Antoine Lambroschini
PUBLISHER: AGENCE FRANCE PRESS
TEXT: BAIKONUR, Kazakhstan — A Soyuz TMA-10 space capsule bearing billionaire Microsoft pioneer Charles Simonyi soared toward the International Space Station (ISS) on Sunday, making him the world’s fifth space tourist.
Kazakhstan’s black sky lit up with orange and yellow flames as the rocket took off on schedule late Saturday, carrying Simonyi toward the ISS along with Russian cosmonauts Oleg Kotov and Fyodor Yurchikhin.
Observers exploded into cries of joy and applause when officials confirmed the craft had successfully entered orbit a few minutes later.
Simonyi’s spokeswoman, Susan Hutchinson, said she was “on the verge of tears.”
“The power in the ignition of those engines, the feeling in the ground gave everybody such a sense of what spaceride is, and so we viewed with awe and great satisfaction,” she said.
“He had a grin on his face, they were doing really well,” she told a friend, then cried out: “Wasn’t that a thrill!”
Russian First Deputy Prime Minister Sergei Ivanov, who attended the launch, smiled and clapped.
The flight, which cost Simonyi 25 million dollars (19 million euros) and is scheduled to dock at the ISS on Monday, is far more than a pleasure trip.
Between snapping shots of Earth, Simonyi will be conducting medical experiments for the European Space Agency and testing high-definition cameras for the Japanese Aerospace Exploration Agency.
He plans to detail his experiences on board in a blog at www.charlesinspace.com.
He will also be preparing a gourmet space dinner for his crewmates, likely with some pointers from U.S. homemaking guru Martha Stewart, his partner and one of the 50 well-wishers who came to watch the launch.
The super-rich lovebirds went without a rumored pre-launch engagement announcement, but Stewart screamed and clapped as Simonyi left the space training center before take-off, banging her hands on the window of his bus and chanting: “Charles! Charles! Charles!”
The dinner Simonyi will prepare in honor of Russian Cosmonauts’ Day on April 12 will have more Stewart-esque flair than the ISS crew is accustomed to.
“One of those dishes has a wine sauce in French style,” Simonyi said. “I think that the team will be very happy to eat something different after all that time in space.”
Yurchikhin, who will command the 15th mission on the ISS, assured jokingly that “the wine sauce will be eaten as sauce” and that the cosmonauts will respect the ban on alcohol.
Simonyi is scheduled to return to Earth on April 20 together with the current ISS team — Russia’s Mikhail Tyurin and American Miguel Lopez-Alegria — while the two Russian cosmonauts will stay on for a 190-day shift in orbit.
Simonyi is the fifth tourist to travel to the ISS, following the United States’ Dennis Tito (2001) and Greg Olsen (2005), South Africa’s Mark Shuttleworth (2002) and an American of Iranian origin, Anousheh Ansari (2006).
Space Adventures, the company that organized the trips, plans to expand its offerings next year to include a 100-million-dollar trip around the moon and a 100,000-dollar budget option: five minutes of sub-orbital space flight.

TITLE: Marchers Request Governor Talks
AUTHOR: By Galina Stolyarova
PUBLISHER: Staff Writer
TEXT: Opposition groups that are planning a march of dissent on Sunday have invited Governor Valentina Matviyenko to attend the protest rally to respond to criticism of her policies.
An umbrella organization that includes the United Civil Front, National Bolshevik Party and smaller protest groups is organizing the protest event at midday on Sunday outside the Theater For Young Spectators. After a meeting its participants will make an attempt to march to City Hall, despite a series of warnings from Smolny and the governor personally that the march has not been given permission to proceed.
The coalition made the request to Matviyenko on Monday in a letter that also leveled criticism at her administration.
“We are convinced communication between the government and the governed in our city has deteriorated to an unacceptable level,” reads the letter. “Officials are protected from ordinary people by … police special task forces and notoriously hypocritical television stations. As a result, you as a city governor have a very limited idea of how life is for the majority of local citizens. It is perhaps your deep isolation that has led you to develop a strong phobia of civil street protests.”
The letter contains a list of demands that protesters are hoping to make to the governor in person on Sunday.
The opposition coalition is asking her to investigate what it says were human rights abuses committed during a previous opposition rally on March 3. It is also calling for the resignation of Leonid Bogdanov, head of City Hall’s Security and Justice Committee, “for systematic violations of the constitutional right of local citizens to hold meetings and gatherings.”
The coalition also seeks to ignite major political changes in the city with a demand to hold new elections to the St. Petersburg Legislative Assembly and an overhaul in the local government that would give more power to the parliament and turn the governor into an executive appointed by the assembly. The governor is currently appointed by the president of the Russian Federation. The document also calls for the “destruction of political censorship in the media.”
Matviyenko has already outlawed the march. Speaking on Channel Five television, the governor argued the march would disrupt traffic and put a strain on public transport and emergency services, and bring the city center to a standstill.
“The March 3 demonstration was effectively a tour de force,” said St. Petersburg National Bolshevik leader Andrei Dmitriyev. “Now we must take things further. We have to make it to the Smolny and hand over our petition directly to the governor or her official representative.”
Maxim Reznik, head of the St. Petersburg branch of democratic party Yabloko, which will take part in Sunday’s rally, said the opposition will demand a one-off time slot on a state TV channel to “spread the true word about the protests.”
“Ordinary people in their majority either do not know about our true intentions — because the television ignores us — or gets a distorted picture,” Reznik said. “We need to go on air just to be able to give people a piece of credible information about ourselves. Because what they have been getting is a diet of distorted stories and discrediting lies.” 
Meanwhile, liberal politicians Mikhail Amosov and Natalya Yevdokimova sent an appeal to the St. Petersburg Prosecutor’s Office to help speed up City Hall’s response to a parliamentary inquiry they lodged last month. 
The two former St. Petersburg Legislative Assembly lawmakers used the last session of parliament on March 7 to send the parliamentary inquiry to Matviyenko, challenging her to reveal who ordered Yabloko activists and other participants in the March 3 demonstration to be detained and is going to be held responible.
The inquiry also asked:
- Who ordered parliamentarian Sergei Gulyayev to be detained and beaten, and who will be punished for it?
- Who requested additional police force units from other regions to be sent to St. Petersburg
- How many police were deployed against the march and who funded the mission?
“Matviyenko responded to all the other queries within 7 days as required by the law, boycotting exclusively our letter,” Yevdokimova said. “By doing so she ignored her duty. Clearly, there is a double standard here, and the governor has to be held responsible.”
Matviyenko’s press secretary Natalya Kutobayeva said on Monday that the politicians will get an official response from the governor in due course.

TITLE: 600 Vow to Fight ‘Orange Pest’
AUTHOR: By Nabi Abdullaev
PUBLISHER: Staff Writer
TEXT: MOSCOW — About 600 young people gathered under imperial black banners on Triumfalnaya Ploshchad on Sunday as their leaders pledged support to President Vladimir Putin and vowed to fight an “orange revolution” in Russia.
The Eurasian Youth Union, a nationalist group whose chief ideologist, Alexander Dugin, has close ties to the Kremlin, had planned a march along Tverskaya Ulitsa, but city authorities only sanctioned the two-hour rally near Mayakovskaya metro station.
“We are supporters of the regime. We support Putin because he created the prerequisites for the rebirth of the nation,” Dugin told the rally. “We want guarantees that Putin will stay for a third term or secure the continuity of his course.”
The Eurasian Youth Union is seen as a Kremlin-backed project to divert youth political activism from the banned, oppositional National Bolsheviks, who demand that Putin resign. When the group was created last year, its leaders pledged to fight Western attempts to influence Russian politics.
“Russia should be strong and not crawling under the West,” Dmitry Zakharov, a rally participant, said Sunday.
Other participants said they had come to oppose the “orange pest,” referring to Western-backed opposition groups. Such groups played an important role in Ukraine’s Orange Revolution in 2004.
“National Bolsheviks want to monopolize street protests and the notion of civil society for themselves, and we want to show everybody today that we, too, are a part of civil society,” said Pavel Kanishchev, waving a black flag decorated with eight yellow arrows symbolizing Russia’s imperial expansion.
The rally began with a public prayer by an Orthodox priest, followed by a monarchic hymn sung by a bearded baritone wearing black garb.
Several participants who declined to give their names said they were not politically active and had come to Moscow because they had been offered a free bus ride.
“There are many people like us here, mostly students from vocational schools in Kovrov, Vladimir and other towns,” said a teenage girl with blue hair and a pierced nose. “I can’t wait for the boring stuff to end and go for a walk.”

TITLE: State Duma Gives Backing To Ukrainian Lawmakers
PUBLISHER: Reuters
TEXT: MOSCOW — The State Duma sided on Friday with Ukraine’s parliament in its defiance of President Viktor Yushchenko’s decree dissolving the legislature and ordering new elections.
The development came as thousands of people, encouraged by organizers with fistfuls of cash and bottles of water, continued to rally over the weekend in support of Prime Minister Viktor Yanukovych in central Kiev.
Duma deputies unanimously approved a nonbinding resolution Friday that said they backed Ukrainian lawmakers’ assessments that the disbandment of the legislature violated the country’s constitution. “State Duma deputies hereby express their strong objections to attempts to solve a political crisis by dissolving a legitimately elected parliament,” the resolution said.
The western-leaning Yushchenko dissolved the parliament last Monday and ordered new elections in what is seen as a last-ditch attempt to reassert his authority. Pro-Russian Yanukovych, who has bolstered his power in the parliament by poaching members of the president’s team, has refused to take part in the elections, prompting a standoff that is paralyzing the country.
President Vladimir Putin told Yushchenko by telephone Friday that he hoped the crisis would be resolved through “political and constitutional means,” the Kremlin said in a statement.
Despite Yushchenko’s decree, the parliament met Friday and approved legislation authorizing the presence of foreign troops for exercises — an issue that prompted demonstrations in Russian-speaking eastern and southern Ukraine against a proposed exercise with NATO forces.
Lawmakers also urged Pope Benedict to stop Catholic clergy from interfering in politics by backing Yushchenko in the dispute. Several senior religious figures, including Catholic Cardinal Lubomyr Husar, issued a statement on Thursday applauding Yushchenko’s order as the sole means of resolving months of political deadlock in Ukraine.
Trying to conjure up the passion of the 2004 Orange Revolution that brought Yushchenko to power, thousands of people have set up tent camps — largely unused — in Kiev’s main Independence Square and outside the president’s office.
“We are here to fight for the unity of Ukraine … and to tell President Yushchenko that his policies do not work,” Mykola Makarenko, a pensioner from Chernihiv, said on the square.
Many others on the square, however, seemed to be enjoying the day out and the free goods on offer, rather than protesting. “I haven’t been to Kiev since I was a schoolgirl. We have been to the Pecherska Lavra [an ancient monastery], seen the parliament, had a look around. It’s a beautiful city,” said Oksana, who works at a school in Odessa.
Among those enjoying picnic lunches on the grass, a woman surreptitiously handed out 50-hryvna notes, equivalent to $10. 
Others lined up for bottles of water, stacked by the music conservatory on the edge of the square.
“I’ll be here for five hours and then will go home,” said Sasha, 18.
Would he stay all weekend? “No it’s Easter, I have to be at home,” he said.

TITLE: Zhirinovsky: LDPR Faction Expelled Two of Its Deputies
PUBLISHER: The St. Petersburg Times
TEXT: MOSCOW — The State Duma faction of the Liberal Democratic Party has ousted two of its most prominent deputies for refusing to participate in regional elections in March, party leader Vladimir Zhirinovsky said Friday.
Zhirinovsky said the two — Suleiman Kerimov, Russia’s second-richest businessman, and Oleg Malyshkin, who ran for president in 2004 — had refused to run on the party’s regional lists during elections to regional legislatures on March 11.
“They have violated party discipline by refusing to participate in the local elections,” Zhirinovsky said, Interfax reported.
He did not say whether the two, who will now serve in the Duma as independent deputies, had also been kicked out of the party.
Parties, in hope of attracting more votes, routinely put federal lawmakers and governors at the top of their party lists during regional elections. But these figures almost never quit their jobs to take up seats in local legislatures.
Despite losing two deputies, the Liberal Democratic Party faction remains the third-largest in the Duma, with 30 deputies, according to the Duma’s official web site.
Both Malyshkin and Kerimov have confirmed that they are no longer in the party’s Duma faction, but have not said why.
Malyshkin suggested that he had left on his own, saying his departure “was a thoroughly thought-over decision,” Interfax reported. Rather than run himself, Zhirinovsky decided to field Malyshkin in the March 2004 election that President Vladimir Putin easily won. Malyshkin, Zhirinovsky’s bodyguard and a former professional boxer, finished in fourth place with 1.4 million votes.
A source close to Kerimov confirmed to Interfax on Friday that Kerimov was no longer in the faction but did not elaborate.
The secretive Dagestani-born businessman made headlines when he crashed an expensive Ferrari in France last November.
Kerimov more than doubled his wealth to $14.4 billion over the past year, becoming Russia’s second-richest man and the world’s 35th in Forbes’ annual list of the world’s richest people.

TITLE: U.S. Commerce Secretary Downplays Tensions
AUTHOR: By Anna Smolchenko
PUBLISHER: Staff Writer
TEXT: MOSCOW — U.S. Commerce Secretary Carlos Gutierrez painted a rosy picture of U.S.-Russian ties during a meeting with economics students last Monday and said post-Soviet reforms had prepared Russia to join the World Trade Organization.
Gutierrez’s upbeat remarks, made at the start of a three-day visit that will include talks with Economic Development and Trade Minister German Gref, surprised some students, who had expected to hear criticism amid growing tensions between the United States and Russia.
Washington has accused Moscow of backsliding on democracy, and Moscow has criticized U.S. foreign policy as unilateral, among other things. Both sides have denied, though, that the friction means a return to the Cold War.
Gutierrez downplayed the tensions, saying people should instead look at the numbers, including $25 billion in annual turnover between the countries.
“The only thing people read once in a while is that we have a disagreement,” he said during a 40-minute question-and-answer session at the Higher School of Economics. Even “family members have disagreement,” he said.
Most questions posed by the students, who spoke in fluent English, focused on sticking points such as Russia’s accession to the WTO, the Jackson-Vanik amendment and obstacles to U.S. investment in Russia.
Journalists were not allowed to ask questions.
“Yes, Russia is ready for the WTO. What Russia has achieved in 17 years, many countries have not achieved in 50 years,” Gutierrez said. “We have a tremendous future economically.”
He noted, however, that the two countries were “still coming to an agreement on intellectual property rights.”
He said he did not know when the Jackson-Vanik amendment, a Soviet-era trade restriction, would be lifted because it was up to Congress to decide that.
Asked about the problems that U.S. companies face in Russia, Gutierrez — in an apparent reference to Boeing — said an aerospace company with a Russian research and development center had an “opportunity to create new products” and sell them to third countries. Russia’s attention has been shifting in favor of Boeing’s European rival, EADS.
Later Monday, Gutierrez met with Natural Resources Minister Yury Trutnev to discuss changes to the subsoil law and cooperation in the timber industry. Trutnev told Gutierrez that Russia had introduced a new amendment to the law that would forbid the resale of strategic deposits to foreign investors, the ministry said. The amendment is now being discussed by the government.
The U.S. Department of Commerce said in a statement last week that Gutierrez’s visit would focus on opportunities for U.S. exporters to sell to the state-owned sector, “which has grown under the Putin administration” and on Russian legislation setting “strict” limits on foreign investment in strategic industries such as energy, aerospace and transportation.
Gutierrez leaves on Wednesday for a two-day visit to Kiev. He will be the first U.S. commerce secretary to visit Ukraine since the country gained independence in 1991.
Also Monday, Gutierrez and U.S. Ambassador William Burns offered some encouragement to Motorola, a U.S. company that has had trouble with Russian customs officials, by posing for photographs at Motorola’s shop in the GUM department store.
A PricewaterhouseCoopers spokes-woman said she did not know whether Gutierrez would meet company executives. PwC’s Russian license could be under threat after the Moscow Arbitration Court ruled recently that the auditor had concealed financial irregularities at Yukos.
At the Higher School of Economics, Gutierrez said Russians would see more U.S. brands and companies arriving soon because Americans felt Russia was a good place to investment. “In the majority of cases, the only obstacle is getting in,” he said.
The commerce secretary expressed dissatisfaction that Russia, with a $1 trillion economy, was only the United States’ 33rd-largest trading partner.
“My total disappointment is that we can do more, we can trade more, we can invest more, and that’s good for everybody,” he said.
U.S. companies and their overseas subsidiaries invested more than $11 billion in Russia last year, about twice as much as in 2004, according to the U.S. Commerce Department. Russians have just started investing in the United States, spending $3 billion so far, Gutierrez said.
Gutierrez, who last visited in 2005, set a “fine example of how to give both frank and very polite answers,” Higher School of Economics rector Yaroslav Kuzminov told the students after the session.
Gutierrez encouraged the young people to become government officials, saying that for him it was more exciting to work as a commerce secretary than to run a $10 billion company. He previously headed Kellogg, the cereal giant.
“If you can serve your country, I’d say do it,” he said.
Students said they enjoyed the session despite having to wait 90 minutes in a cramped hall for Gutierrez to arrive.
Yevgenia Ryazantseva, a first-year student at the school, said she liked what she had heard about U.S.-Russian relations. 
“Frankly, I thought everything was much worse,” Ryazantseva said.

TITLE: Cisco Goes Shopping For Latest Start-Ups
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Cisco Systems has announced an $18 million investment into leading Russian e-commerce site Ozon.ru as part of the more regular financing of venture projects and technological start-ups in Russia.
“While Russia has low Internet penetration in terms of a percentage of its overall population, in absolute terms, it has as many Internet users as some Western European countries,” Bob Agee, vice president of Cisco Russia, said in a statement issued last week.
“The amount of technical talent in Russia shows that the country is ready to become more technologically advanced. Increased investment in communications infrastructure can help improve productivity, diversify the economy and increase the standard of living across the country,” Agee said.
In this particular deal the investors — Cisco Systems, Index Ventures and Holtzbrinck Ventures — have acquired a 30 percent stake in Ozon.ru, which receives 120,000 hits daily. With tens of thousands of book, movie and music titles on offer, Ozon is helping to shape the future of consumer e-commerce in Russia, the Cisco statement said.
The $18 million will be used “to continue to drive the adoption of Ozon’s site among Russian consumers” — namely to develop Ozon’s logistics system, product lines and distribution centers across Russia.
Ozon.ru emerged in St. Petersburg in 1998 as an online book store. With investment from Baring Vostok Capital Partners the company expanded and now, according to the web site, 350,000 people regularly buy products at Ozon.ru. Over 300,000 items are available for order. The company offers courier and postal delivery across Russia and has a call-center.
Cisco will continue to invest in Russia and Eastern Europe focusing on technology-related start-ups and venture projects. The company has already hired an investment manager to be based in Moscow.
“Our venture investment in Russia is a continuation of a global strategy that we’ve implemented in Europe, Israel, China and India, which is to invest in local start-ups and venture teams and help promote the growth of a local innovation economy,” said Hilton Romanski, director for global corporate business development at Cisco.
“Ozon is the first in what we hope will be an expanding venture relationship between Cisco and Russian entrepreneurs and investment partners,” Romanski said.
“Cisco sees Russia as a promising market, not least in terms of venture investment. Ozon.ru is a stable company, a leader in its segment, with an understandable type of business developed by Amazon.com,” said Dmitry Lisenkov, Investment Manager at RTFM, managing company for the Russia Technological Fund.
Sharing the risks with the two investment funds is an additional advantage for Cisco in this project, Lisenkov noted. “Cisco trusts these funds, and they could unite their analytical resources for this venture,” he said.
Ozon.ru could increase its value several times over, Lisenkov said. As for Cisco’s potential, Lisenkov suggested that the company could invest over $30 million in Russian technological companies and start-ups within the next three year.
To invest in start ups in Russia on a regular basis Cisco will need to establish a team of specialists working specifically on that or cooperate with local investment groups, Lisenkov said.
Igor Yegorov, director of the St. Petersburg branch of the U.S. Russia Center for Entrepreneurship, suggested that Cisco could be interested in Russian market development, and its goal might be to stimulate businesses that have the potential to become buyers of Cisco’s equipment. 
Cisco could also be interested in new technologies and innovative ideas. As an example, he recalled similar activities by Intel corporation exercised through Intel Capital Venture Fund.
“This looks like an attempt to create direct connection with the customers. The market for telecom equipment in Russia is difficult. Communicating with the customers directly, they will get deeper understanding of the market and customers’ demands,” Yegorov said.

TITLE: Gas Powers Soothe Consumer Anxieties
AUTHOR: By Barbara Lewis and Simon Webb
PUBLISHER: Reuters
TEXT: DOHA — Leading gas powers discussed on Monday the idea of transforming their benign grouping into an OPEC-style cartel, but sought to reassure consumer nations that it was business as usual for now.
Host nation Qatar, home to the world’s third largest gas reserves, rejected the idea of a cartel and insisted the Gas Exporting Countries Forum would work to keep producers and consumers happy.
“I hate the word cartel,” Qatari Energy Minister Abdullah bin Hamad al-Attiyah told reporters as he went into the gas group’s first ministerial meeting in two years.
He said the scheme would be discussed, saying the forum had an open agenda, but he emphasized cooperation between producers and consumers.
“We should work towards greater cooperation to stabilize the market, to give confidence to our consumers. We should send a very positive statement to our customers that we are with you, not against you,” Attiyah said.
The prospect of converting the 14-member gas grouping into a more aggressive body was rekindled in January by Iran’s supreme leader, and more hawkish ministers have seized on the idea.
“We think such an organization would be beneficial. There are proposals for it, but such a process would be lengthy,” said Iranian Energy Minister Kazem Vaziri-Hamaneh.
Venezuela, a political ally of Iran, also backed a gas version of the Organization of the Petroleum Exporting Countries (OPEC), and together with fellow South American energy producer Bolivia, is also striving to set up a regional cartel.
“I think it is a very good idea. Gas is the second source of energy in the world,” said Rafael Ramirez, energy minister of Venezuela. “We need to defend our interests.”
Neither Iran nor Venezuela is a gas exporter, although they hold large reserves which they are expected to develop eventually.
Russia, the world’s biggest gas supplier, has played down the OPEC suggestion, even though the nation’s president earlier this year described the idea as interesting.
Russian Energy Minister Viktor Khristenko said this weekend Russia had no intention of fixing prices at consumer nations’ expense.
“We do not, and will not, set ourselves the goal of ganging up on anybody. It would be destructive and it would make no sense at all,” Khristenko said, adding that he wanted the forum to form part of global energy dialogue between producers and consumers.
Khristenko was speaking in Moscow on Saturday and has refused to comment further since his arrival in Doha though Russian news agencies quoted him as saying he would propose hosting the next meeting of the gas exporters’ forum in Russia.
Analysts say Russia needs to reassure its customers it is reliable as the leading gas supplier has twice halted energy exports to Europe in pricing disputes with transit countries. 

TALKING SHOP
Since its formation in 2001, the gas producers’ forum, responsible for around 60 percent of world gas exports, has been viewed by analysts as a talking shop.
Although the rising importance of gas as an energy source has raised its profile, they did not expect any radical decisions at Monday’s meeting.
Several ministers said the possibility of the group becoming an OPEC was impractical as gas producing nations each look to supply different regions of the world and usually set prices on the basis of long-term contracts.
“Gas and oil are different,” said Indonesia’s Energy Minister Purnomo Yusgiantoro.
Algerian Energy and Mines Minister Chakib Khelil agreed.
“There is a small, liquid (gas) market, but that does not justify the creation of an OPEC-like organization,” he said. “In theory, we can talk a little bit more and maybe develop the idea.”
Analysts view the advent of liquefied natural gas (LNG) as a move toward a more liquid, global gas market.
LNG is gas cooled to liquid form so it can be shipped to various markets and is far more flexible than pipeline gas, which is supplied to long-term customers.

TITLE: Polymetal To Spend $150M On Project
PUBLISHER: Reuters
TEXT: Polymetal, the country’s third-largest gold miner, plans to spend $150 million to $200 million by 2010 to develop its Albazino project in the country’s Far East as part of a wider expansion, the company said Friday.
St. Petersburg-based Polymetal plans to build two plants to process ore and concentrate from the deposit, which will produce at least 200,000 to 250,000 ounces per year of gold, almost as much as the company’s entire production of the metal last year.
“The capex will be divided equally between 2008 and 2009, with a little remaining in 2010,” said Bree Schuette, Polymetal’s director of investor relations.
Gold rose 23 percent in value last year, with prices hitting 26-year highs on a wider investment boom in commodities.
Polymetal, also the country’s top silver miner, was valued at $2.4 billion in a share listing in February. It produced 256,000 ounces of gold and 17.3 million ounces of silver last year and is developing projects in Russia and Mongolia.
Polymetal last year acquired Resources Albazino, which is developing the deposit of the same name in Khabarovsk region. The deposit is around 150 kilometers from the Pacific port of Nikolayevsk-on-Amur. The company said local authorities had approved plans to build an ore-processing plant in Polin Osipenko, the area within Khabarovsk where Albazino is located.

TITLE: Steel Maker MMK Sets IPO Range
PUBLISHER: Reuters
TEXT: MOSCOW — MMK, Russia’s third-largest steel maker, said on Monday it had set the price range for its international share float at $12.25-$15.50 per global depositary receipt.
MMK already has a small free float in Russia, but plans to issue GDRs, each equivalent to 13 ordinary shares, in London and ordinary shares, with a price range of $0.94-$1.19, in Russia.
MMK aims to raise around $1 billion through the offering of new shares, a banking source told Reuters. The company has hired ABN Amro, Morgan Stanley and Renaissance Capital as lead managers for its international float.
Bankers involved in the IPO have valued MMK at between $9.7 billion and $13.6 billion based on its existing market capitalisation of about $11.5 billion.
MMK said in a statement the offer included an over-allotment option to purchase GDRs representing up to 15 percent of the offer. A two-week road show was due to start on Monday and pricing is expected by late April.
MMK, also known as Magnitogorsk Iron and Steel Works, operates Russia’s largest single steel plant in the southern Ural mountains. The company is majority owned by its chairman and one of Russia’s richest men, Viktor Rashnikov, and ranks 20th in the world in terms of output.
MMK raised crude steel output 9.4 percent last year to 12.46 million tonnes, or 17.6 percent of Russia’s total.  Russia is the world’s fourth-largest steel producer, with output led by Evraz Group and Severstal. MMK last year exported 46.5 percent of its finished products.
Shares in MMK, which has a 1 percent free float in Russia, closed on Friday at $1.085. They have risen nearly 25 percent since the beginning of the year.

TITLE: Russian Firms Acquire Record-Breaking Habit
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: Analysts have praised Russian companies for record levels of  M&A transactions last year, more than any other country in the CIS and Central and Eastern Europe.
Ernst & Young estimated transactions involving Russian companies to have totaled $71 billion last year — a 41 percent increase on the 2005 figures. Russian acquisitions abroad accounted for $11.4 billion. In the CIS, Russia is clearly ahead, followed by Kazakhstan and Ukraine.
“We expect that the Russian and CIS M&A market will continue to grow, taking into account trends for consolidation in key industries, significant interest from foreign investors, expansion plans of the major players and substantial proceeds from IPO and bond issues,” Aleks Sapojnikov, Partner and Head of the M&A group at Ernst & Young, said Friday in a statement.
In terms of value, the metals and mining sector for the first time led the M&A market, overtaking the oil and gas industry. In terms of the total number of deals, the most active sectors were financial services, media and retail.
According to EY, foreign acquisitions in Russia nearly doubled reaching a total of $13.7 billion. At the same time, Russian leaders continued to expand abroad. Russian companies participated in over 440 deals — a decrease of about 10 percent compared to 2005. However the deals have become larger.
PricewaterhouseCoopers in its report issued at the end of March described M&A activities in Central and Eastern Europe as “extremely buoyant.”
Over 2,500 publicly-disclosed private transactions were completed in CEE countries last year. The number of transactions rose by 37 percent while their total value rose by 79 percent and reached a record-breaking $163 billion compared with $91 billion in 2005.
“Much of this growth was due to the outstanding performance in Russia which recorded 1,210 transactions totaling $111 billion during 2006,” said Margaret Dezse, Corporate Finance Partner of PricewaterhouseCoopers.
According to PwC, the M&A market in Russia grew by 111 percent last year. The average deal size was $181 million. Out of 1,210 deals 922 were completed by domestic companies.
Russia saw 142 transactions in excess of $100 million last year. The hottest industries were manufacturing (including the metals sector), financial services and energy and utilities.
Russia closed 102 outward transactions, staying the most active outbound investor in the CEE region. 
The main targets of Russian investors were Ukraine, the U.K. and the U.S.
The largest transaction in CEE also took place in the Russian Federation: as part of a consolidation, Rosneftegaz acquired a 23.21 percent stake in Yuganskneftegaz for $6.6 billion.
Russia is also notable for its mega-merger between the two leading food retailers — Pyaterochka and Perekrestok. The deal stood out because of its size of $1.37 billion and because it was a landmark merger that heralded further mega-deals in the retail sector.
“Foreign companies are expanding their activities in Russia, taking full advantage of the opportunities offered by the increased purchasing power of local consumers. While the natural resources sector remained a key sector in terms of M&A activity, other sectors such as the consumer goods and financial services sectors gained in importance,” said Steven Berger, CEE Transactions Leader at PricewaterhouseCoopers.

TITLE: Trade Balance Seen As Leveling Off by 2010
AUTHOR: By Simon Shuster
PUBLISHER: Staff Writer
TEXT: MOSCOW — The country’s balance of payments looks to be shifting away from exports and toward the domestically oriented import market, but analysts are unsure that there is enough momentum to make this shift successfully.
The trade balance, which counts exports net of imports, was down 23.4 percent compared to the first quarter of last year, with exports staying nearly flat as imports shot up more than 36 percent year-on-year, according to preliminary figures released by the Central Bank on Thursday. 
By 2010, the trade balance will fall back to zero, moving Russia away from the mixed blessings of export dependence, Alexei Ulyukayev, deputy head of the Central Bank, told a business conference Monday.
“It seems clear that the oil price levels we saw last year will not be repeated,” Ulyukayev said. “A much larger role will be played this year by noncore industries. Electricity and banking sector IPOs alone will outpace the capital raised last year, and very importantly, these will not be related to the engines that drove growth in the oil and gas sector.”
The Central Bank’s policy of letting the ruble appreciate has been one of the main burdens on the oil and gas sector, which has come off the boil in recent months. Even though it makes up more than 60 percent of federal budget revenues, Ulyukayev showed little sympathy for these bread-and-butter industries and signaled that the Central Bank would hold firm in keeping the ruble strong against the dollar-euro currency basket. 
“We know very well from experience that [the oil and gas sector] is too dependent on volatility in foreign markets, and these can fluctuate 10 percent to 15 percent in a very short time.”
Oil prices, however, have given the sector a badly needed boost in recent weeks. Though it cooled off slightly Thursday and Friday, the price of crude remains above $64 per barrel. If it falls back to a level of below $60 per barrel, investors may be put off too much by falling oil and gas stocks to actively explore other sectors. The current level, however, should “provide a near-term floor under Russian equities, encouraging a wider variety of investors to venture into different sectors and tiers of the market,” Alfa Bank wrote Friday in a research note.
Renaissance Capital suggested that the appetite for risk is too low after last month’s global markets correction to expect investors to dive into new emerging market stories. “On a 12-month basis, we believe that there is a much larger chance than the market is currently discounting of an international repricing of risk leading to a major slump [more than 25 percent] in the Russian equity market,” Roland Nash, the bank’s head of research, wrote in a strategy statement for the second quarter.
The Central Bank figures also showed a healthy pace of capital inflows, which stand at $13 billion for the quarter.

TITLE: May 10 for Samaraneftegaz Sale
PUBLISHER: Combined Reports
TEXT: MOSCOW — Yukos’ production and refining assets near the Volga River will be sold May 10 at a bankruptcy auction, the Federal Property Fund said Saturday in a notice published in Rossiiskaya Gazeta.
The lot includes Samaraneftegaz, an oil-production unit in the Samara region, about 800 kilometers southeast of Moscow, and the Samara refineries of Novokuibyshev, Kuibyshev and Syzran. 
State energy giants Rosneft and Gazprom are considered the favorites to snap up the lot, probably via intermediary companies. 
Bids will be taken from April 9 to May 7, and the starting price is 154.09 billion rubles ($5.93 billion).
The Samara refineries processed 19.7 million tons of oil last year, according to government figures.
Italy’s Eni and Enel won Yukos’ 20 percent stake in Gazprom’s oil arm and its gas assets with a $5.8 billion bid at an April 4 auction. Gazprom plans to buy the stake in its oil unit, Gazprom Neft, and most of the gas units within two years. Rosneft won the March 27 auction for 9.4 percent of its own shares with a $7.6 billion bid.
Rossiiskaya Gazeta also carried a notice that Yukos’ headquarters in central Moscow will be auctioned as part of a lot on May 11. Bids will be accepted from April 9 to May 8, and the starting price is 22.07 billion rubles.
Another lot to be formed out of Yukos’ oil-product retail assets, including its filling station chain, will also be sold on May 10, a notice from the property fund said. The retail lot will have a starting price of 7.74 billion rubles ($300 million), and bids will be taken from April 9 through May 7.
Bloomberg, SPT

TITLE: Ignatyev Settles For Softer Budget Policy
AUTHOR: By Gleb Bryanski
PUBLISHER: Reuters
TEXT: MOSCOW — Room exists for a cautious easing of federal budget policy after years of fiscal prudence and for some of the country’s massive oil wealth to be invested in the economy, the chairman of the Central Bank said Friday.
Sergei Ignatyev also told reporters that the bank had no immediate plans to change the U.S. dollar share in the country’s foreign exchange reserves, currently around 50 percent.
Russia’s Central Bank has built up the world’s third-largest gold and foreign exchange reserves — $338.7 billion as of March 30 — to curb appreciation pressures on the ruble. Its dollar purchases reached $118 billion last year.
The $108 billion oil stabilization fund, which cushions the budget from slumps in oil prices, is counted as part of the reserves. The government plans to split the stabilization fund into a reserve fund and a fund for future generations next year.
Ignatyev said the Central Bank had backed the government’s first three-year budget, designed to help the country through the 2007-2008 election period.
The proposed budget, which sees surpluses disappear by 2010, will go to the State Duma this month. Ignatyev said he saw the possibility of a softer budget policy.
“In principle we can now soften the budget policy and lower taxes,” Ignatyev said.
But he also called for caution and moderation. “If we increase expenditure, we should understand we do it for good reason.”
Ignatyev also spoke in favor of the idea of investing some of the country’s oil wealth into the economy through development institutions, since the need to sterilize petrodollar inflows was no longer acute.
The average annual price for Urals crude, the country’s main export blend, is expected to fall to $55 per barrel in 2007 from $61 per barrel in 2006.
“I do not exclude the possibility of the government placing some of its accumulated resources in development institutions,” Ignatyev said. The government plans to boost growth, pumping money into sectors outside oil and gas through development institutions such as the investment and venture funds as well as the Development Bank, to be created this year.
Vladimir Dmitriyev, head of Russia’s debt and pension fund manager Vneshekonombank, which will be used as a platform for the new Development Bank, said the new investment vehicle could issue loans worth up to $15.5 billion next year.
“We believe the bank will be created in the middle of the year,” Dmitriyev told reporters.
Ignatyev said the bank would not change the composition of the reserves.
“There are no serious reasons to do it,” he said. He added that he did not see significant changes in the dollar’s role as the world’s reserve currency in the medium term.
The bank had earlier said that about 40 percent of its reserves was kept in euros and about 10 percent in sterling. It also has a small holding in yen and Swiss francs.

TITLE: Oil, Gas Reserves Shrink
PUBLISHER: Reuters
TEXT: Reuters 
MOSCOW — The country’s oil reserves shrank by 7.3 billion barrels from 1994 to 2005 as the country failed to replace dwindling West Siberian reserves with new discoveries in East Siberia and other regions, an official said Friday.
“The proportion of reserves that can be extracted has fallen from 42 percent at the start of the 1990s to 27 percent,” Sergei Fyodorov, head of subsoil policy at the Natural Resources Ministry, told a conference.
Russia’s energy reserves are classified information, but BP’s statistical review of world energy has put them at 74.4 billion barrels.
“At the current rate of growth in oil production, there won’t be enough reserves to keep up,” Fyodorov said.
Gas reserves were down by 2.4 trillion cubic meters over the same period, he said. BP figures put Russia’s natural gas reserves at 47.8 trillion cubic meters in 2005.
When the Yamburg and Medvezhye fields are fully depleted, 1 trillion cubic meters of gas will remain untapped, Fyodorov said. The fields are some of Gazprom’s biggest.

TITLE: SABMiller Planning Bid For Scottish & Newcastle
PUBLISHER: The Associated Press
TEXT: LONDON — Brewer SABMiller is weighing a move to acquire rival Scottish & Newcastle in a 6.5 billion pound ($12.8 billion) deal, a British newspaper reported Sunday.
Britain’s Sunday Express, quoting unnamed sources it said were close to SABMiller, claimed a bid could be made for the rival brewer within days, valuing the company at around 7.12 pounds ($13.90) per share.
Shares in Scottish & Newcastle closed Thursday at 6.065 pounds ($11.90). There was no trading in London on Friday, a British public holiday. The newspaper reported that, if it succeeded in acquiring the rival company, SABMiller planned to sell Scottish & Newcastle’s British interests — including the country’s highest-selling lager Foster’s — and the firm’s French business interests to spirits giant Diageo PLC.
Investment bank JP Morgan is advising SABMiller on the potential acquisition, the newspaper reported. SABMiller and Scottish & Newcastle could not immediately be reached for comment.

TITLE: Fradkov Questions Sell-Offs
PUBLISHER: Reuters
TEXT: MOSCOW — Cabinet ministers gave Deputy Economic Development and Trade Minister Kirill Androsov a rough ride Friday when he proposed bolstering the country’s privatization plans.
“There’s no point in rushing like mad and pushing it through recklessly,” Prime Minister Mikhail Fradkov told a government meeting, after putting off a decision on the plan to an unspecified date. “You don’t need to impose it on us. We’ve all gotten a bit cleverer,” he said.
Androsov and Economic Development and Trade Minister German Gref want to widen the existing plan under which the government will privatize 11 state bodies and sell stakes in 78 enterprises. Androsov said the budget factored in 41 billion rubles ($1.58 billion) of gains from privatization in 2007. 
Other ministers pitched in to support Fradkov, who said he opposed reducing state involvement in several sectors.
Agriculture Minister Alexei Gordeyev criticized the plan because it would mean privatizing centers that carry out artificial insemination of cattle.
“Who would we turn to when we have to get a cow pregnant?” Fradkov asked.
Natural Resources Minister Yury Trutnev later issued a statement with a more robust rebuttal of Gref’s plans. “The minister remarked that the ministry cannot support plans that have not been thought through for privatizing state bodies and enterprises which are part of the state forestry, water and subsoil agencies,” the statement said.

TITLE: AvtoVAZ, Magna Struggle With Model
PUBLISHER: Combined Reports
TEXT: MOSCOW — AvtoVAZ and Canada’s Magna International are struggling to meet their goal of jointly making a car they can sell for under $12,000, Vedomosti reported Friday, citing unidentified people familiar with the project.
The projected retail price of the new model has risen 10 percent since the two companies formed a venture in December and may rise as much as 20 percent, the newspaper said.
AvtoVAZ will struggle to survive if they cannot create a new model for under $15,000, Vedomosti said, citing Deutsche UFG analyst Yelena Sakhnova.
The newspaper cited a businessman close to the carmaker’s management as saying AvtoVAZ could scrap its deal with Magna over the pricing issue.
AvtoVAZ and Magna, however, said Friday that their cooperation was continuing as planned. “Optimal decisions on all issues of cooperation have been found,” AvtoVAZ and Magna said in a joint statement. 
Bloomberg, SPT

TITLE: Central Bank Predicts Slower Appreciation
PUBLISHER: Reuters
TEXT: Reuters 
MOSCOW — The ruble will appreciate slightly less quickly in 2007 than last year provided oil prices stay at current levels, Central Bank Chairman Sergei Ignatyev said Friday.
“With international prices for oil staying at their first quarter levels, the ruble may appreciate by 4 percent to 5 percent in real effective terms,” Ignatyev told a banking conference Friday.
The real effective exchange rate, or REER, of the ruble is calculated using nominal exchange rates and inflation levels in Russia and its trading partners.
The appreciation hurts producers and makes domestic industries less competitive. The ruble appreciated by 7.4 percent in real effective terms in 2006.
Ignatyev said the ruble has appreciated by 2.6 percent in the first quarter of 2007 compared with 6.2 percent in the same period of 2006. The Central Bank is under pressure from the industrial lobby to stop the ruble’s appreciation.
“We do not expect money supply growth in 2006 to lead to higher inflation in 2007,” Ignatyev said. M2 money supply grew 49 percent last year.
The country is running a huge current account surplus due to high oil prices, and resulting foreign currency inflows create appreciation pressure on the ruble. The government forecasts oil prices will stabilize and the current account surplus will shrink. 
The average annual price for Urals, Russia’s main export blend of oil, is expected to fall to $55 per barrel in 2007 from $61 per barrel in 2006.
The Central Bank allowed the ruble to appreciate in nominal terms against the basket in measured moves throughout 2006 and at the start of 2007 as it fought inflation by making imports cheaper. Consumer prices grew by 3.4 percent in the first quarter of 2007 compared with 5.0 percent in the same period of 2006, making further nominal appreciation of the ruble against the basket less likely.

TITLE: Mitsui, Statkraft Want Power
PUBLISHER: Bloomberg
TEXT: MOSCOW — Mitsui, Japan’s second-largest trading company, and Norwegian utility Statkraft are considering building hydropower plants in Russia as the country prepares a law to support alternative energy.
Executives from the companies will visit the North Caucasus next week to study a plan to build seven plants with a total capacity of 125 megawatts, said Andrei Petrushinin, spokesman for Hydro OGK, Russia’s biggest operator of water-generated electricity.
“The investment climate in the Caucasus is changing for the better and we see almost equal interest from European and Asian investors,” Petrushinin said on the sidelines of a conference on alternative energy in Moscow on Friday.
The country is seeking to lessen its reliance on fossil fuels by increasing nuclear power and hydropower production.

TITLE: Gazprom Aims For $1 Trillion Value by 2014
AUTHOR: By Lucian Kim and Nina de Roy
PUBLISHER: Bloomberg
TEXT: MOSCOW — Gazprom, Russia’s natural gas export monopoly, aims to quadruple its market value to $1 trillion within a decade and become the world’s biggest company. 
“We will reach a $1 trillion market capitalization in a period of seven to 10 years,’’ Deputy Chief Executive Officer Alexander Medvedev, 51, said in a Moscow interview on April 6. “We’d like to be the most valued and most capitalized company in the world.’’ 
The goal would be more than twice today’s $439.6 billion market value of Exxon Mobil Corp., the world’s largest publicly traded company, and would exceed Russia’s 2006 economic output of $975 billion. It would also surpass the gross domestic product of countries including the Netherlands, Australia and South Korea. 
Gazprom, the world’s biggest gas producer, has more than eight times Exxon Mobil’s total reserves and is seeking more. The state-run company took control last year of Royal Dutch Shell Plc’s Sakhalin-2 venture, which plans to start shipping liquefied natural gas in 2008. It’s also developing the Shtokman project in the Arctic, Russia’s largest untapped deposit of the fuel. 
“I believe it’s a reasonable target that we’ll double our market cap’’ from its current $244 billion in five years, Medvedev said. The company’s shares in London climbed 60 percent last year, outpacing a 36 percent increase for Exxon Mobil. 
Moscow-based Gazprom, which controls about 17 percent of the world’s gas, had 184.5 billion barrels of oil equivalent in reserves as of 2004, according to filings. A $1 trillion figure would value those reserves at about $5.50 a barrel. Exxon Mobil had reserves of about 21 billion barrels of oil equivalent as of 2004 and 22.1 billion last year. The 2006 figure values the Irving, Texas-based company’s reserves at almost $20 a barrel. 

Saudi Arabia 
Gazprom’s reserves compare with the recoverable oil in Saudi Arabia, the world’s biggest oil exporter, estimated last year at 259 billion barrels, according to the Canadian Association of Petroleum Producers. 
“Gazprom does have the potential if the management were willing to implement reforms and cost-cutting,’’ said Steven Dashevsky, head of research at Aton Capital in Moscow. “You can see very little of what the Gazprom management has done to make the business more valuable.’’ 
Gazprom, which supplies a quarter of Europe’s gas, plans to begin selling gas to East Asian customers next year from Sakhalin. 

LNG Production 
Gazprom plans to produce as much as 20 million metric tons of LNG within seven years, from nothing today, equal to about 13 percent of global consumption last year.  “I believe 15 to 20 million tons is the minimum to be a serious player,’’ Medvedev said. 
Qatar is the world’s largest LNG exporter and plans to expand capacity to 77 million metric tons by the end of the decade, accounting for a third of world LNG supply in 2010, Qatar’s Ras Laffan Liquefied Natural Gas Co. said last month. LNG demand was about 158 million tons last year, according to Andy Flower, an independent LNG consultant in the U.K. 
Global demand for LNG is rising because of environmental concerns about coal and oil. Production of LNG, gas cooled to a liquid for transport by ship, will almost double between 2005 and 2010, lifting its share of the global gas market to as much as 31 percent from 22 percent in 2005, PricewaterhouseCoopers LLP predicted in a report last month. 

Pipeline Exports 
Gazprom today relies solely on pipelines for exports. LNG will allow Gazprom to ship gas to Japan, South Korea and the U.S. 
The company is renewing talks with possible partners for the Shtokman field, and plans to start LNG output by 2014, Medvedev said. In October, Gazprom said it would develop the project alone. 
“I don’t exclude that the list of potential participants could be extended,’’ said Medvedev, who oversees oil and gas exports. Gazprom’s original shortlist comprised Total SA, Chevron Corp., ConocoPhillips, Norsk Hydro ASA and Statoil ASA. 
Future partners probably would be allowed to book some of Shtokman’s reserves, estimated at 3.7 trillion cubic meters of gas, in exchange for sharing technology and investment risks, Medvedev said. 
The delays at Shtokman make it unlikely the field will be producing LNG by 2014, said Mikhail Korchemkin, director of Malvern, Pennsylvania-based East European Gas Analysis, which analyzes production and pipeline projects in the former Soviet Union. A more likely start date would be 2016 or 2017, he said. 
“Gazprom has no experience in drilling offshore,’’ he said. “They haven’t started anything at Shtokman yet.’’ 
Another source of gas for export is the Kovykta field in eastern Siberia, with the license held by BP’s Russian unit, TNK- BP. Gazprom and BP are in “permanent contact’’ over Kovykta, which would probably supply China, Medvedev said.

TITLE: Rusal Wants Essar For Alumina Plant
PUBLISHER: Reuters
TEXT: MUMBAI — Russian aluminium giant Rusal has approached India’s Essar Group to jointly build a 1 million tonne alumina refinery in Orissa, the Economic Times reported on Monday, citing sources in Essar.
The paper, which estimated the cost of such a project at about $1 billion, quoted Essar sources as saying there were informal talks with Rusal, although “nothing has taken off.” “They had discussions in the past, but nothing is concluded,” a spokesman for Essar Group said when contacted by Reuters, but did not give further details.
In late March, Rusal completed a merger with smaller Russian rival SUAL and some assets belonging to commodities trader Glenncore to form United Company Rusal, the world’s largest aluminium producer.

TITLE: Gazprom Wants More Electricity
PUBLISHER: Reuters
TEXT: Reuters 
MOSCOW — Gazprom wants to buy into OGK-5 and TGK-5 when the state privatizes the two electricity firms, a source close to the company said Friday. 
By bidding for stakes, Gazprom could become a competitor to Italy’s Enel and KES, which represents billionaire Viktor Vekselberg’s interests in the electricity sector.
“OGK-5 and TGK-5 are one of the main priorities,” said the source close to Gazprom, who declined to be identified.
He added that Gazprom was also interested in assets belonging to other electricity firms OGK-2, OGK-6 and TGK-7.
“They are also on the list, but you couldn’t say that they were our priority. OGK-5 will be more important,” he said.
Gazprom spokespeople were not immediately available for comment.
The company is keen to build up its presence in the electricity market to capture more of the revenue from end consumers.
It said in a statement Friday that management had submitted the firm’s electricity strategy to the board, advocating expansion into both Russian electricity and the wider European sector.
Russia is reforming its power sector, with former monopoly Unified Energy Systems, or UES, a colossal holding firm employing about 700,000 people, spinning off most of its assets to create separate generation, transmission and distribution units. The state will keep the national grid.
UES assets are to be broken up into seven wholesale generating companies known as OGKs, and 14 regional power producers known as TGKs.

TITLE: Gas Tax Decision Put Back
PUBLISHER: Reuters
TEXT: MOSCOW — The government may put back a decision on whether to raise taxes on gas production, Industry and Energy Minister Viktor Khristenko said Friday.
“On the question of a possible increase in taxation, we’ll probably have to come back to that toward the end of the year,” Khristenko told reporters.
The government’s mineral-extraction tax on gas producers has not changed over the past five years and is set at 147 rubles ($5.65) per 1,000 cubic meters, a small fraction of the tax on oil producers. Gazprom says it needs to save money on taxes to invest more in gas production. 
The government will gradually switch to long-term gas supply deals at market prices from the current quota supplies at state-capped prices, and Khristenko said it would need to see how the new system worked before setting new gas taxes. 
Some analysts have predicted the mineral-extraction tax on gas will be about 250 rubles per 1,000 cubic meters.

TITLE: Moscow No Match for Kiev
AUTHOR: By Fyodor Lukyanov
TEXT: For Russians the current political imbroglio in Kiev was similar to the struggle for power that took place in Moscow in September and October 1993.
On the outside, the two episodes look almost identical. In both cases, the heads of state lost patience with endless opposition from the parliament and opted to call for new elections. Parliament refused to recognize the decision, the public was at odds with the political elite over its interpretation of the Constitution, and the specter of two separate governments trying to rule simultaneously hung over the country with all the usual negative consequences. The similarity between the two events is even more striking in that both arose a little more than two years after a revolutionary restructuring of national authority — August 1991 for Russia and December 2004 for Ukraine.
But a focus on these impressive similarities is misleading. The current situation in Kiev differs fundamentally from the earlier events in Moscow.
The first difference is that Russia had just experienced a critical socio-economic crisis, so the struggle for power in Moscow played out amid a mix of potentially explosive political forces. Despite numerous problems, today’s Ukraine is a developing state.
The second is that there were almost no systemic avenues in place in the Russian system in 1993 by which different political groupings could pursue their interests. Fragments of the Soviet system were thrown together with elements of the new ideology, and out of this jumble emerged the aspirations of new social strata. The question of parceling out state property had yet to be decided, and it was impossible for any stable coalition of political interests to form. And no mechanisms to govern interaction between them — whether in the form of public political parties, private back-room dealings or lobbying — existed yet anyway.
Today’s Ukraine has powerful and well-developed business groupings that exert influence through publicly supported political parties. The interaction between these groups provides the foundation for the entire political system.
The third major difference is that the fundamental questions of national authority and the future organization of the country were decided on the streets of Moscow in 1993. Each of the opposition groups expected to come out victorious, but it was the president’s party that ultimately prevailed.
The diverse structure of Ukrainian society and elites makes it highly unlikely that any one group can even hope for an outright victory over the others. The cultural, historical and economic differences between the regions and different social groups are not going to vanish under any circumstances, and this is a reality with which any responsible Ukrainian politician must come to terms. Events of recent years demonstrate a clear pattern: As soon as any political group — and the economic and other interests behind it — tries to pull too much of the political blanket to its side of the bed, the remainder of the system immediately reacts to restore the original balance.
Just as in physics, every action in Ukrainian politics generates an equal and opposite reaction. The radical swing of the pendulum during the Orange Revolution upset the balance, but the pendulum quickly swung in the other direction, with the results of elections for the Verkhovna Rada, Ukraine’s parliament, counter-balancing the earlier presidential election results. A compromise between the squabbling factions last summer established a new balance, but this has eroded over the last several months. When the parliamentary coalition decided to reconfigure itself to increase its influence, its opponents lined up against it.
The Ukrainian political map is like a microcosm of the very multipolar world that Moscow would like to see on a global scale. Systems of this type are unstable by nature, subject as they are to the ebb and flow of alliances and coalitions that try to battle the natural pull back toward equilibrium. It is impossible for one group to dominate such a system completely, just as it is impossible for one group of nations to dominate the larger international community fully. A two-party system in Ukraine is theoretically possible, but it would not be able to accommodate the country’s great cultural and political diversity. The only option left, therefore, is the current system of never-ending maneuvering by various political forces as slow-forward progress continues.
This does not mean that there won’t be occasional dramatic reversals, but these will inevitably be followed by corrections to the general course.
Ukrainian society also differs from Russia’s in its greater ability to maintain a semblance of order. Despite the fact that almost all governmental bodies were paralyzed from March to June last year — the Verkhovna Rada could not convene, there was no confirmed government or Constitutional Court, and the country seemed to be on the verge of chaos — Ukrainians serenely labored on and the economy actually grew more than it had when Yulia Tymoshenko was prime minister.
The current collision of political forces in Kiev is but the latest in a series of showdowns to determine the direction the country will take. In the winter of 2004 and 2005 the political elite had the presence of mind to avoid taking drastic steps, opting instead for civilized competition between rival factions — however ludicrous or unattractive the process might sometimes have appeared. If common sense and the spirit of compromise prevail in this situation as well, it will demonstrate that Ukraine’s expressed wish to be considered a European nation is well founded.
The country is going through a difficult maturing process toward becoming a properly functioning democracy. It is very important that actors to the west and east try not to interfere in the process. The West’s “democratizers” and Russia’s “great power” proponents have already played out their own campaigns in Ukraine and no longer have any rightful claim to be representing the interests of the Ukrainian people. The country has demonstrated its ability to find the most pragmatic solution to its problems intuitively, or at least to minimize the damage resulting from the actions of domestic and foreign politicians.

Fyodor Lukyanov is editor of Russia in Global Affairs.

TITLE: An Idea That Just Won’t Die
AUTHOR: By Georgy Bovt
TEXT: Just when the political noise had subsided over the idea of amending the Constitution to allow President Vladimir Putin to run for a third term, recently re-elected Federation Council Speaker Sergei Mironov has proposed that the Constitution be amended to allow the president to serve three consecutive terms of five to seven years, rather than the current two terms of four years.
Such an amendment would require support from two-thirds of the State Duma, three-quarters of the Federation Council and two-thirds of the regional legislative assemblies. The Constitutional Court’s 1995 interpretation of this procedure states that the president would not have veto powers in this event.
What is interesting is that less than six months ago Mironov was an outspoken critic of the third-term idea. Mironov is generally considered to be close to Putin, and his unexpected forecasts have a knack for coming true. Mironov and his A Just Russia party reflect the mood of a significant segment of the Kremlin administration, including deputy chief of staff Igor Sechin. Does this mean Mironov was voicing the hopes of this group? The evidence suggests this is the case.
Some uncertainty has developed among the country’s political elite with the emergence of A Just Russia as a second “party of power,” as was demonstrated during the March 11 regional elections. More used to and comfortable with taking directions from above, local elites were confused by the choice between United Russia and A Just Russia.
And now the political elite is faced with another burdensome choice: should Putin stay or go. And that was the response in the Federation Council, with few voices daring to label Mironov’s initiative as what it really was — a downward slide toward dictatorship. It is unlikely that many people at the regional level will summon the courage to buck this trend.
Those who support the third-term initiative will be working on at least two parallel policies. The first is to stop worrying about Russia’s image in the West. 
This image has deteriorated significantly in recent months, with the perception of Putin’s energy doctrine as energy blackmail and the murder of journalist Anna Politkovskaya and poisoning of former security services agent Alexander Litvinenko on his watch, and his February speech in Munich demonstrated a more aggressive stance toward the West. 
Officials close to the Kremlin are increasingly saying that Russia has nothing to gain by trying to ingratiate itself with the West. The second policy is related to what could be called “the Orange threat.” The West, as the theory goes, is preparing to stage a Ukrainian-style revolution in the run-up to the December State Duma elections, as seen in its support for the Dissenters’ March on April 14 and for opposition groups led by former Prime Minister Mikhail Kasyanov and Garry Kasparov. Concern over such support was behind the formation of the pro-Kremlin Nashi movement. 
Although today it does little more than assemble in flash mobs that send a thousand SMS messages to Putin, it could still be mobilized into a street army to fight the opposition. The message is that only Putin can prevent a revolution.
As the end of his term nears, those who want him to stay will increasingly argue that the country will fall apart without him. And it is difficult to predict how much pressure there will be and what methods might be used to convince others. 
Ultimately, Putin may have to make an unpleasant choice: Either cast off those members of his inner circle who are desperately trying to allow him to stay, or else give in to the pressure to remain in office.
If he does stay, of course, he will explain it as bowing to the wishes of millions of Russian working people.

Georgy Bovt is editor of Profil magazine.

TITLE: Change at the Top
AUTHOR: By Anna Scherbakova
TEXT: The Chairman of Sberbank Northwest, the region’s largest bank, Leonid Shats, resigned last week. He was followed by several top-managers. The circumstances around this resignation are mysterious. Officially, Shats stepped down voluntarily. But unofficial sources say he was forced to resign after the bank underwent an inspection. For me the latter seems more likely despite the lack of any official confirmation. 
The latest banking legislation is very strict as a result of an extensive battle against money laundering. Indeed many businesses, including pretty peaceful ones, use banks for some operations that could not exactly be described as legal — to avoid paying taxes, for instance. 
Shats has a reputation as a very strict and demanding manager. But he could not control every transaction done in such a huge branch, and his ultimate demise may neither be his fault nor the fault of his team. We might even suggest that they are to receive some kind of promotion, though nothing has yet been announced. 
Nevertheless, if Sberbank’s management changed its attitude towards the Northwest branch, it did so very quickly. Last November Sberbank CEO Andrey Kazmin visited St. Petersburg to celebrate Sberbank’s anniversary and seemed satisfied with the business of the regional affiliate. The results of 2006 are more than sustainable – Sberbank Northwest increased its portfolio of loans to private individuals by 80 percent and lent 50 percent more than last year to corporate clients. Its profit rose by 70 percent to 6.6 billion rubles (or $ 245 million). 
Such a huge company will not be particularly affected by a change of management but slight adjustments are possible. 
Shats was not only aware but also involved in many of the deals with major clients. And it was his decision to make conditions for respected borrowers better or worse. Sberbank Northwest’s new Chairman will probably have his (or her) preferences, so the list of companies with access to its rich assets could change. That could change St. Petersburg’s business landscape quite significantly and makes Shats’ successor very important for the local economy. 
But the candidate has yet to be named. Another enigma is where Shats will go. 
His own resignation might well have come as a unwelcome surprise with nothing prepared in the way of a move. 
First of all, there are few positions of the same caliber in St. Petersburg. A local business paper quoted him as saying he is ‘going to the Kremlin.’ 
For me it looks like a sad joke, because none of the city’s top businessmen who have moved to the capital have ever announced these plans in advance. 
And only one of our countrymen could afford to move to the Kremlin along with his entire team, and he’s still got a job there until next March.

Anna Shcherbakova is St. Petersburg bureau chief of business daily Vedomosti.

TITLE: An Unwelcome Reception
AUTHOR: By Mark H. Teeter
TEXT: With the May holidays just weeks away, hordes of Russians are furiously planning trips abroad, after which they will furiously recount how people abroad treated them like Russian hordes.
Writing of abuse and injured pride at the hands of foreigners is a Russian tradition dating from at least the late 18th century, when playwright Denis Fonvizin decried the “ignoramuses” in France who “hear for the first time that there is such a place as Russia” with “a language different from theirs.” Fonvizin made short work of the offending Gauls, declaring “the Frenchman has no common sense, and if he did he would consider it the greatest personal misfortune.”
Another classic Russian writer-traveler, Fyodor Dostoevsky, was heartened by Fonvizin’s musings but still suffered pangs of inferiority before Europeans a century later. Beholding the marvelous bridge at Cologne, Dostoevsky imagined how its German tollkeeper was beholding him: “He has guessed that I am a foreigner, and in fact a Russian, I thought. At least his eyes were practically saying ‘You see our bridge, you pathetic Russian — well, you’re a worm before this bridge, and before any German, because you don’t have such a bridge yourself.’ You will agree that this was offensive.” Who but a Russian could take offense at what a little old man in a tollbooth just might have been thinking?
If such empire-age travel notes reflect a national mindset of the insulted and the injured, many of the 21st century’s popular equivalents — the comments posted on hotel and travel agency web sites by returned Russian travelers — add the whine of Soviet-era complaint-book entries. Svetlana from Moscow writes that at her Egyptian resort, “we were third-class citizens. They put Russians in little one-story huts … to make a sort of ‘Russian Harlem.’ We were deeply offended, especially after we saw the arrangements for the Italians.” Yelena warns others of her vacation spot in Turkey: “Russians, NEVER come here!!! They don’t like Russians in this hotel. The Turks beat up one young Russian for defending his wife. This place is a CATASTROPHE!” Yet another Russian’s experience in central Europe may represent the attitudinal nadir of the genre: Not only do people “especially dislike us in the former-socialist states,” writes LL, but it gets worse: “Traveling through various countries, I came to the conclusion that people fear Russians and don’t like them anywhere.”
Responses to these unhappy wanderers range from the therapeutic to the remonstrative. The helpful options include a Chelyabinsk newspaper’s advice column for travelers called “Why Don’t People Like Russians Abroad?”; an Internet forum on tourist psychology with a subsection titled, “The treatment of Russians abroad, or why people don’t like us”; and a recent Internet photo essay by a traveler named Olga, titled, “Which Russians don’t foreigners like?” These are complemented by counter-testimonials from many satisfied Russian tourists who insist that the behavior of their compatriots is the real problem; simply put, foreigners react well to Russians who act well.
Whether it’s counseling or auto-therapy they need, disgruntled Russian travelers may find some company for their misery in Americans. From the benign naivete of Mark Twain’s “Innocents Abroad,” the American profile has grown considerably darker. Over the last 50 years, Vietnam, big business, fast food, crass consumerism, Iraq and a good deal else has driven much of the world to a shorthand for us drawn from a different book: “The Ugly American.” As the U.S. head of Business for Diplomatic Action put it: “Surveys consistently show that Americans are viewed as arrogant, insensitive, over-materialistic and ignorant about local values.” One response to this has been a booklet called the “World Citizens Guide,” featuring a series of tips for U.S. travelers to help improve the United States’ battered international countenance.
This guide has some bullet-point advice that both Russians and Americans could profit from, such as “Think as big as you like but talk and act smaller,” “Listen at least as much as you talk,” “Think a little locally,” and “If you talk politics, talk — don’t argue.”
For our two blundering superpowers, these micro-homilies could make macro-sense. The trick, of course, is in the application. Can Americans and Russians, traditionally super-sized in worldview and behavior, really learn to “talk and act smaller”?
An old saying has it that Russians want to be respected and Americans want to be loved. Perhaps thinking smaller is the key to both — and to making disgruntled Russians have less to write home about.

Mark H. Teeter teaches English and Russian-American relations in Moscow.

TITLE: Regulators to Allow ABN Split
PUBLISHER: Reuters
TEXT: LONDON — The head of the Dutch Central Bank said regulators would not object in principle to an offer by a rival bidder for ABN Amro even if it meant the Dutch bank was broken up, the Financial Times reported on Monday.
“It might be that a solid bank takes over and decides to restructure,” Nout Wellink, president of the Dutch Central bank, told the newspaper.
“Well, let them come to the supervisor, and we will look at it, and when it looks fine there will be no problem,” the newspaper quoted him as saying.
His comments to the FT, signalling an offer would be considered even if it meant breaking up or selling off parts of the bank to different groups, were seen as easing the path for possible rivals to a Barclays’ bid.
Barclays entered exclusive talks last month for a takeover of ABN Amro, which would create the world’s fifth or sixth largest bank, after the Dutch bank came under pressure from investors, including British hedge fund TCI, to consider a sale or break-up to boost shareholder returns.
The two banks have outlined a framework to create a bank listed in London, with headquarters in Amsterdam and with its two top jobs split. Price is the key issue yet to be resolved.
But recently there have been signs other European banks might be interested.
Spanish bank Santander is working with Britain’s Royal Bank of Scotland  to table a counter-bid for the Dutch bank, the Sunday Telegraph reported in London.
The two banks were putting together a break-up bid and an offer could be presented soon after an agreed deal, expected to be announced by Barclays and ABN Amro within the next 10 says, the report said.
Analysts have said RBS is one of the most likely banks to launch a rival offer but it has declined comment on its plans and is not expected to move until Barclays shows its hand.
Initially, Wellink stepped in to defend ABN Amro in February after TCI sent an open letter urging the Dutch bank’s management to break up the company or sell it outright.
But since then a Barclays-ABN Amro deal has gained acceptance after the European Commission quickly intervened to say it would not tolerate central bank interference in cross-border deals.
Dutch Finance Minster Wouters Bos even stepped in to soothe concerns, saying a Barclays-ABN Amro merger fitted within broader consolidation in Europe’s banking sector.
A successful bid for ABN Amro would propel Barclays into the world’s 10 biggest wealth managers.
ABN Amro said it had 142 billion euros ($189.5 billion) of assets under management at the end of 2006, while Barclays said it had 93 billion pounds ($183.6 billion) of client assets.
Using slightly different measures and counting $155 billion in assets under management, Scorpio put ABN Amro 11th on its wealth management ranking at the end of 2005.
Barclays was 29th with some $47 billion. Together, the two groups would rise to 10th position.

TITLE: Oil Below $64 After Iran Frees UK sailors
PUBLISHER: Reuters
TEXT: LONDON — Oil fell below $64 a barrel on Monday, extending declines that followed Iran’s release last week of 15 British sailors and marines.
The two-week detention of the UK military personnel by Iran had driven U.S. crude oil prices above $68 a barrel, their highest since September last year.
U.S. crude fell 45 cents to $63.83 a barrel by 1050 GMT. London Brent crude was down 23 cents at $68.01.
Brent maintained a more than $4 premium over U.S. crude partly because of more plentiful supplies of U.S. crude relative to Brent.
Trading was subdued because much of Europe is shut for the Easter Monday holiday.
The release on Thursday of the British sailors and marines has eased fears of an increase in tensions between the West and Iran, the world’s fourth biggest oil exporter.
But concerns about Iran’s uranium enrichment program as well as the conflict in Iraq remain a big factor underpinning oil prices, which are well above this year’s lows of $49.90 a barrel in January.
“‘Iranium’ remains a hot issue and, as importantly, the lack of an Iraqi solution will continue to haunt the Middle East for months to come,” said Olivier Jakob, from oil industry consultancy Petromatrix.

URANIUM ENRICHMENT
Iran President Mahmoud Ahmedinejad may announce on Monday his country has begun the first stage of what it calls “industrial scale” uranium enrichment, which the West fears could be used to make nuclear weapons. 
Tehran has rejected demands from the United Nations to halt enrichment and has instead pressed ahead with what it says is a peaceful nuclear program.
Supportive supply/demand fundamentals have limited the fall in prices from six-month highs reached during Iran’s detention of the British military personnel.
“There are fears of a tight U.S. gasoline market over the summer,” said Christopher Bellew, senior vice president at Bache Commodities.
U.S. gasoline stocks fell by 5 million barrels in the week to March 30, when analysts had expected a drop of just 300,000 barrels. U.S. gasoline demand usually peaks over the summer.
Members of the Organization of the Petroleum Exporting Countries (OPEC) insist the global oil market is well supplied and high prices reflect tensions over Iran rather than any shortage.
Iran’s Oil Minister Kazem Vaziri-Hamaneh said 1.7 million barrels per day in oil supply cuts that OPEC agreed to last year had balanced the market.
“After the OPEC decisions to cut, which have been fairly well implemented, we see stability in the market,” he said on the sidelines of a gas meeting in Qatar, attended by seven of OPEC 12 members.

TITLE: World Bank Chief Seeks New, More Effective Focus
AUTHOR: By Krishna Guha
PUBLISHER: Financial Times
TEXT: WASHINGTON — The World Bank is carrying out a review that will lead to the aid agency cutting back or even abandoning some activities to focus resources where they can be most effective, Paul Wolfowitz told the Financial Times.
The World Bank president said he had charged Francois Bourguignon, its chief economist, with drawing up the new strategy for the world’s biggest multilateral aid agency. While Wolfowitz refuses to prejudge the review, many bank officials think it is engaged in too wide a range of social sector projects and want it to focus more on promoting economic growth.
Wolfowitz said the review team would consult widely but would not shy away from tough choices. 
The review will be welcomed by the bank’s shareholder governments, which have pressed Wolfowitz to provide more clarity and detail on his plans for the aid agency. But it will unleash a storm of lobbying from non-governmental organizations anxious that the bank should continue to support their own favored areas of operation.
The review comes as Wolfowitz is mired in renewed internal controversy, this time over terms extended to Shaha Riza, his partner, when she was seconded from the bank to the U.S. State Department. The dispute escalated on Friday when a spokesman for the then chairman of the bank’s ethics committee told the FT that it did not approve Ms Riza’s package, which included a big pay rise. 
Disclosing details of the strategy review, Wolfowitz told the FT it was time to ask “what have we learned” since the bank’s current strategy was set in place by James Wolfensohn, his predecessor, in 2001. “What interventions are most effective for promoting development? He asked. Where can the bank be most effective?”
One of the biggest changes since 2001 is the proliferation of different organizations in the aid world, with private groups such as the Gates Foundation and specialist vertical funds growing in importance. Wolfowitz said: “The question is — what is our comparative advantage and where can we contribute?”
He played down the prospect of radical change, saying: “I do not think there is urgent change of direction needed.”
But he added: “I do think some greater clarity about trade-offs is in order. The strategy is going to have to say these are the things that it is important to do more of — which inevitably means there are some things we have to stop doing or do less of.”

TITLE: Tiger Loses His Bite, Johnson Wins Masters
AUTHOR: By Mark Lamport-Stokes
PUBLISHER: Reuters
TEXT: AUGUSTA, Georgia — Zach Johnson, defying all the odds, held off a late challenge by four-times champion Tiger Woods to claim his first major title by two shots at the Masters on Sunday. 
Two strokes off the pace overnight, the 31-year-old American fired a three-under-par 69 at a sun-drenched, fast-running Augusta National to finish on one-over 289.
Johnson, whose only previous PGA Tour victory came at the 2004 BellSouth Classic, reeled off three birdies in four holes from the 13th to take control.
Although he bogeyed 17 after missing a four-foot putt, he displayed strong nerves to get up and down from beside the green at the last and save par.
“I’m as normal as they come and I had some people looking after me today,” a tearful Johnson told reporters after equaling the highest winning Masters total set by Sam Snead (1954) and Jack Burke junior (1956).
“This being Easter, Jesus was with me every step. I felt him. It was awesome.
“Today was a day of perseverance and patience, I guess. I just feel very blessed and very honored.”
The Iowa native became Augusta’s most surprising champion since compatriot Larry Mize in 1987 after a week that yielded the fourth highest scoring average (75.881) in the tournament’s history.
World number one Woods, hunting his third consecutive major and a fifth green jacket at Augusta, had to settle for a share of second place with South Africans Retief Goosen (69) and Rory Sabbatini (69) after closing with a 72.
Britain’s Justin Rose, who double-bogeyed the 17th, posted a 73 to tie for fifth with American Jerry Kelly (70) at four over. 
One of six players tied for the early lead in a wildly fluctuating final round, Johnson set the tone by chipping in for birdie on the eighth before tightening his grip after the turn.
Out in one-under 35, the Ryder Cup player rolled in a curling seven-footer at the par-four 14th to stretch his lead to two.
After parring the 15th, he hit a six-iron off the tee to eight feet at the par-three 16th before ramming home the putt to go three shots clear, pumping his fist in celebration.
Despite his stumble at the par-four 17th, Johnson held on to secure the biggest victory of his career and a check for $1.26 million by equaling the day’s best round.
“I really wasn’t looking at the leaderboard and didn’t know where I stood until I peeked at the 17th,” he said. “I bogeyed but executed well from there on.
“This is very, very surreal,” added the Florida-based professional, who was making only his third appearance at the Masters. “I have dreamed about this for years.
“It makes it that much more gratifying knowing that I beat Tiger Woods, there’s no question about it. They say a giant has to fall at some point.” 
Woods, who briefly led by one after making a birdie at the second hole, spectacularly eagled the par-five 13th to stay in the hunt for a 13th major title as the 71st Masters headed for a tight finish. 
Having struggled for his best form for much of the day, he hit a superb long-iron into the green which span back down the slope to within three feet of the hole. 
Woods tapped in the putt to get to three over par, two behind Johnson. 
He failed to build on that momentum, however, and found water at the par-five 15th en route to a regulation par. 
Woods missed a 10-foot birdie putt at the 16th before parring the last two holes. 
“I had a chance but, looking back over the week, I basically blew this tournament with two rounds where I had bogey, bogey finishes,” said Woods, referring to his poor end to the first and third days. 
“That’s four over in two holes. The last two holes, you just can’t afford to do that and win major championships.”

TITLE: Anger as Freed Brits Sell Stories to Press
AUTHOR: By Luke Baker
PUBLISHER: Reuters
TEXT: LONDON — Britain’s Ministry of Defense faced fierce criticism on Monday for letting 15 sailors and marines held captive in Iran sell their stories to the media. 
The two sailors who have so far done so have also been roundly admonished, with former military commanders suggesting they were being used as pawns in a government propaganda war.
Faye Turney, the 25-year-old mother who was the only woman captive, has given exclusive interviews to Britain’s leading tabloid newspaper and to a television news program, earning what one newspaper said was $197,000.
She said the Iranians asked how she felt about dying for her country and warned she may never see her daughter again.
Iran freed the group on Thursday, 13 days after surrounding their boats in what it said was its territory but Britain said was Iraq’s.
Arthur Batchelor, the youngest of the group at 20, has also sold his story, saying he “cried like a baby” in his cell after he was blindfolded, handcuffed and taunted by his guards.
“The sailors and marines will regret it and realize it was not such a good idea to cash in,” Major General Sir Patrick Cordingly, a senior commander during the 1991 Gulf War, told BBC radio. 
“I hope they give all the money to charity.”
But while Turney and Batchelor have been accused of behaving like reality TV stars, the strongest censure has been directed at the Ministry of Defense, which said it had waived rules barring such sales because of huge public interest.
In the past, such exceptions have been made for winners of Britain’s highest medal, the Victoria Cross.
William Hague, foreign affairs spokesman of the opposition Conservatives, said his party would question the decision when parliament reopened on April 16. Michael Heseltine, a former Conservative defense minister, called for an inquiry.
Defense specialists and former commanders said the decision brought dishonor on the British military and accused the ministry of using the sailors and marines in a propaganda battle, a tactic little better than Tehran’s use of them.
Iranian television showed new footage on Sunday of the 15 looking relaxed, playing table tennis and chess and watching a soccer match on television while they were in Iran, in apparent contradiction of the troops’ depiction of harsh treatment.
British servicemen and women are traditionally tight-lipped about their time in the forces, and families of soldiers killed in Iraq have pointed out they have not sold stories about the loss of their loved ones.

TITLE: Alonso Wins For Resurgent McLaren
AUTHOR: By Alan Baldwin
PUBLISHER: Reuters
TEXT: LONDON — Sunday’s Malaysian Grand Prix was a vindication for Fernando Alonso, Lewis Hamilton and, above all, McLaren.
There can be no doubt now that double champion Alonso made an astute move in jumping from Renault to a team that failed to win a race in 2006, and no more uncertainty about McLaren’s wisdom of appointing 22-year-old rookie Lewis Hamilton as his team mate.
Sepang, with Alonso leading Hamilton to the first McLaren one-two since September 2005 and first win since October of that year, ended a barren phase for the Mercedes-powered Formula One team and opened a potentially glorious new one.
The victory cemented the team’s return to the front while champions Renault, winners of both titles and dominant in Malaysia for the past two years, have lost their way.
“It’s a wonderful surprise what we have achieved in such a short time,” Alonso said at the post-race news conference after regaining the lead in the championship from Ferrari’s Kimi Raikkonen and stretching McLaren’s in the constructors’ standings.
“A lot of work has been done inside the team, a lot of effort from everybody to be ready for the first race, but we never expected to be that competitive.
“It’s something that’s difficult to believe,” the Spaniard added.
Alonso had announced at the end of 2005, when he won his first title, that he was joining McLaren and it is easy to forget now what a leap of faith that seemed last year.
The 25-year-old won six of the first nine races for Renault in 2006 and finished second in the other three. His former team mate Giancarlo Fisichella, winner in Malaysia last year, finished sixth at Sepang on Sunday and said it felt as good as a podium given the champions’ current difficulties.
This year’s battle is clearly between McLaren and Ferrari, winners in Australia, and pre-season fears about Hamilton’s readiness for the fight look laughable now.
The Briton made all the difference on Sunday with another sensational start, overtaking both Ferraris through the first corners to effectively decide the outcome of the race.
While Alonso pulled away at the front, Hamilton shrugged off Felipe Massa’s challenge in the first Ferrari and held Raikkonen at bay in the other.
Third in his first race in Melbourne, second in Sepang — the question being asked now is whether he can win in Bahrain next weekend.
“I thought coming into Formula One that had we got sixth or seventh in our first race, that would have been great for us,” his proud father Anthony said on Sunday.
“Having got third in Melbourne and second here, it’s just crazy. I’m frightened at what’s going to happen next.”
The youngster, the first driver since compatriot Peter Arundell in 1964 to stand on the podium in his first two grands prix, once again found himself playing down the soaring expectations.
“You have to take it step by step,” he said. “This is another stepping stone on the steep learning curve that I have and for sure the next one has to be a win but we have to push together as a team.”

TITLE: Iran Begins ‘Industrial’ Production of Uranium
AUTHOR: By Ali Akbar Dareini
PUBLISHER: The Associated Press
TEXT: NATANZ, Iran — Iran on Monday announced that it has begun enriching uranium with 3,000 centrifuges, dramatically expanding a program that the United Nations has demanded it halt. 
President Mahmoud Ahmadinejad said at a ceremony at the enrichment facility at Natanz that Iran was now capable of enriching nuclear fuel “on an industrial scale.”
Asked if Iran has begun injecting uranium gas into 3,000 centrifuges for enrichment, top nuclear negotiator Ali Larijani replied, “Yes.” He did not elaborate.
The U.N. has imposed limited sanctions on Iran until it suspends enrichment a key process that can produce either fuel for a nuclear reactor or the basis of a warhead. The United States and its allies accuse Iran of seeking to build nuclear weapons, a claim the country denies.
The announcement suggests Iran has succeeded in operating a larger number of centrifuges at its Natanz enrichment facility in central Iran. The country has said its goal is to install and start working with 3,000 centrifuges.
Ahmadinejad did not specify how many centrifuges were now operational as he spoke at a ceremony at the facility, marking the one-year anniversary of Iran’s first success in enriching small amounts of uranium.
“With great honor, I declare that as of today our dear country has joined the nuclear club of nations and can produce nuclear fuel on an industrial scale,” Ahmadinejad said.
“Now we are entering the mass production of centrifuges and starting to launch industrial scale enrichment, another step toward the flourishing of Islamic Iran,” Vice President Gholamreza Aghazadeh said earlier at the ceremony at Natanz.
Aghazadeh, who heads Iran’s Atomic Energy Organization, did not elaborate. Industrial-scale enrichment is the term Iran uses to mean a capability to produce greater levels of nuclear fuel — which would suggest Iran has increased the number of centrifuges working at Natanz.
Iranian state television reported Monday that an Iranian Revolutionary Guard general who is banned from traveling abroad under the sanctions has visited Russia without any difficulty.
General Mohammad Baqer Zolqadr, who is also deputy interior minister for security affairs, was quoted on the state TV web site as saying that his six-day journey to Moscow, which ended Monday, showed “the ineffectiveness of the resolution.”
The resolution calls on all governments to ban visits by the 15 individuals and says that should such visits occur — presumably for exceptional circumstances — the countries should notify a U.N. committee.
Russian Foreign Ministry spokesman Andrei Krivtsov confirmed that Zolqadr visited Russia. He told The Associated Press that the resolution does not prohibit visits by the listed individuals, but calls for heightened vigilance “directed first of all at people who are directly related to nuclear programs” — suggesting that Zolqadr was not.
The unveiling of new centrifuges at Natanz, in central Iran, would be a strong show of defiance toward the United Nations, which has vowed to ratchet up sanctions as long as Iran refuses to suspend enrichment. The Security Council has set a new deadline of late May.
Tensions are also high between Iran and the West following the 13-day detention of 15 British sailors by Iran. The sailors, who were seized by Revolutionary Guards off the Iraqi coast, were released on Wednesday, but since then have said they were put under psychological pressure by their captors to force them to “confess” to being in Iranian waters when captured, angering many in Britain.

TITLE: Team Russia Advances To Davis Cup Semi-Finals
AUTHOR: By Clare Fallon
PUBLISHER: Reuters
TEXT: LONDON — Marat Safin once again proved Russia’s Davis Cup hero of the hour, putting the defending champions into the semi-finals with a victory in the deciding rubber against France on Sunday.
The former world number one’s 7-6 6-3 6-2 triumph over Paul-Henri Mathieu gave Russia a 3-2 win and a place in September’s semi-finals against Germany.
Safin had performed a similarly vital role in four previous deciding rubbers in Davis Cup, including in last year’s final when he clinched victory over Argentina to give the Russians their second title.
Sunday’s win in Moscow’s Luzhniki Arena kept intact Russia’s unbeaten record at home since the 1995 final.
Germany, Sweden and the United States had already secured semi-final places after Saturday’s doubles.
Germany failed to complete a fifth successive whitewash of neighbours Belgium on Sunday. The Belgians won both the reverse singles in Ostend to make the final scoreline 3-2.
Former champions Sweden, who will host the U.S. in the Sept. 21-23 semi-finals, finished with a 4-1 scoreline against Argentina after Jonas Bjorkman won the first of the reverse singles for the home side in Gothenburg and Juan-Martin Del Potro took a consolation point for the visitors.
Safin, the world number 27, had been dropped from Saturday’s doubles because of a foot injury. He wore a bandage on Sunday but still dominated the match against Mathieu who was unable to break the big Russian.
The rubber was the shortest match of the three-day tie and Safin, a late replacement for Mikhail Yuzhny, declared that the outcome had never been in question.
“I had no doubts that I would win,” he told reporters. “And confidence is everything in tennis.”
Sebastien Grosjean had levelled the tie at 2-2 earlier on Sunday by beating Igor Andreev 7-5 4-6 2-6 6-3 6-4 in the first reverse singles.
World number four Nikolai Davydenko, who replaced Safin for the doubles, and Andreyev beat Grosjean and Michael Llodra 3-6 7-5 6-3 3-6 6-3 on Saturday after Friday’s opening singles had ended all square with wins for Mathieu and Yuzhny.
Russia will have home advantage again against Germany in September and French captain Guy Forget said he expected another Russian victory.
“They are the best team in the world,” Forget told reporters. “They can win again this year.”
The 18-year-old Del Potro’s 7-6 6-4 win over Robert Lindstedt in Sunday’s final, dead rubber, was the only bright spot for Argentina who struggled with the fast, indoor carpet surface in Gothenburg’s Convention Center.

TITLE: Christian World Celebrates Easter Together
AUTHOR: By Frances D’Emilio
PUBLISHER: The Associated Press
TEXT: ROME — From Moscow to Washington, Rome to Jerusalem, Christians of the Orthodox and Western faiths celebrated Easter on Sunday, prayed for a better future and relished their ancient rituals. 
The alignment of the two faiths’ Easter calendars, based on equinox and moon phases, occurs every few years, and this year’s overlap made the narrow streets in the Holy Land especially crowded.
At the Vatican, the Eastern Christian celebrations of Easter resounded across the steps of St. Peter’s Basilica when black-robed clerics intoned a long chant from the Byzantine liturgy during Pope Benedict XVI’s outdoor Mass for tens of thousands of faithful. St. Peter’s Square was ablaze with color from tulips, tiger lilies, hyacinths and azaleas from the Netherlands.
Benedict, head of the world’s 1.1 billion Catholics, tempered his message about Easter joy with a litany of suffering in the world today, including what he decried as “continual slaughter” in Iraq and bloodshed in parts of Africa and Asia.
In Washington, a dawn crowd gathered for an Easter service at the Lincoln Memorial. Bundled up in blankets, scarves and hats, the worshippers sang “God Bless America” as the sun’s rays glimmered on the reflecting pool.
President Bush worshipped at the chapel at Fort Hood, an Army post 50 miles southwest from his ranch in Crawford, Texas. The sprawling post has sent thousands of soldiers to the war in Iraq.
“I had a chance to reflect on the great sacrifice that our military and their families are making,” Bush said after the service. “I prayed for their safety, I prayed for their strength and comfort, and I pray for peace.”
A bagpiper played “Amazing Grace” and led a pre-dawn crowd of more than 200 up Mount Davidson, San Francisco’s highest peak, which is topped with a 103-foot concrete cross. Pastors from churches of several denominations led prayers for soldiers in Iraq.
Bethany Baptist Church in Boulder, Colorado, used graffiti, nails and an interactive prayer labyrinth with nine stations to tell the story of the crucifixion. Pastor Rob Stout said labyrinths were created in the Middle Ages as a way of symbolizing the journey to Jerusalem.
“Graffiti has an interesting history to it. I call it vandalism. Some call it art. We wanted to use it because the story of the passion and the crucifixion of Christ is a very raw story,” Stout said.
After weeks of Lenten sacrifice and fasting in preparation for Easter, many Christians in Eastern Europe enjoyed holiday meals including brightly colored hard-boiled eggs. Roast lamb was featured on many tables in the Balkans as well as in Italy.
Cries of “Christ is risen!” went up in Macedonia after midnight, when priests symbolically announced Jesus’ victory over death. Archbishop Stefan, head of the Macedonian Orthodox Church, called for peace “in our homeland and among all the people in the world.”
While Christians are a tiny minority in Turkey, for historical reasons the Orthodox patriarchate has its home in Istanbul, ancient Constantinople, and the spiritual leader of the world’s 200 million Orthodox, Ecumenical Patriarch Bartholomew I, is based there.
Most of the worshippers packing the Church of St. George at a Saturday night Easter vigil service were visitors from Greece.
In the Pacific’s predominantly Christian Solomon Islands, struggling with earthquake and tsunami losses, frightened villagers descended from the hills to celebrate Easter.
“Maybe it’s a punishment from God,” said one worshipper, Furner Smith Arebonato. “Before, there were few people in church. Now, after the earthquake, the church is filled with people, some of them never went to church before.”

TITLE: French Presidential Election Kicks Off
AUTHOR: By Anna Willard
PUBLISHER: Reuters
TEXT: PARIS — France’s presidential election campaign officially began on Monday with candidates unveiling television and radio spots to try and win over the vast army of undecided voters. 
The twelve hopefuls have been sparring for months appearing regularly in the media and making campaign stops around France ahead of the first-round vote on April 22.
As of Monday broadcasters will have to follow strict electoral rules including equal airtime for each of the candidates to make sure the campaign is fair.
Polls show right-winger Nicolas Sarkozy has a comfortable lead over his main rival, Socialist Segolene Royal.
Interest in the campaign is high but the debate has jumped from one theme to another, leaving many voters overwhelmed and uncertain about whom to chose.
Commentators say the media bombardment that starts on Monday may just add to the confusion.
“This big fog that is programmed on the airwaves will not help get rid of the record indecision that has marked the 2007 edition,” the Left-leaning Liberation said in an editorial.
“With two weeks to go, never have so many voters seemed so unsure. The more passionate they are for the debates, the less sure they are of their choices.”
A poll on Sunday said 42 percent of voters are undecided.
The candidates are allowed 45 minutes of spots split between public television and radio to get their message across before April 20. They are also allowed to stick up posters on official boards in front of voting stations.
Sarkozy’s television spot showed him dressed in a suit and tie speaking in front of his campaign slogan “Together, everything is possible.”
The shot cut away to show him shaking hands with factory workers and the elderly, and he promised to improve schools, reduce unemployment and be tough on benefit fraud.
A CSA poll on Monday for Le Parisien newspaper said 59 percent of voters expect Sarkozy to be the next president compared to just 18 percent for Socialist candidate Royal.
A second round will take place on May 6 between the two front runners, if, as expected, no candidate gets over 50 percent in the first round.
Royal’s campaign posters feature a close up photograph of her under the headline “change” and with her slogan “France rules,” which uses a play on words to indicate a female ruler.
She is lying in second place in surveys of voting intentions but her score has slipped as centrist candidate Francois Bayrou’s popularity has risen and as the debate focused on immigration and security, helping Sarkozy.
The poster for far-right candidate Jean-Marie Le Pen, who is lying fourth in the polls, says simply “Vote for Le Pen.”

TITLE: Australia Dominates England in Antigua
AUTHOR: By John Mehaffey
PUBLISHER: Reuters
TEXT: ST JOHN’S, Antigua — Australia first contained then crushed England on Sunday with another ruthless exhibition of one-day cricket in the World Cup Super Eights.
After restricting England to 247 in 49.5 overs, despite Kevin Pietersen’s first one-day century against the old enemy, the defending champions coasted to victory with seven wickets and 16 balls to spare.
Australia, bidding to become the first team to win a hat-trick of World Cups, moved two points clear of Sri Lanka and New Zealand in the second-round standings with eight.
England, still on two, have to win each of their three remaining matches to have any chance of qualifying for the semi-finals on April 24 and 25.
Pietersen’s 104 was a strangely muted affair after he reached his half-century from 49 balls with five fours and a six.
He took another 68 balls to get to his fourth one-day hundred and struck only one more boundary. Pietersen was also the beneficiary of some unusually fallible Australian fielding with Ricky Ponting missing a difficult chance at mid-on and Matthew Hayden dropping a simple catch running to mid-on as the batsman started walking off the field.
England, who had elected to bat before the largest crowd yet to assemble at the Sir Vivian Richards Stadium for the final World Cup match in Antigua, lost captain Michael Vaughan (5) and Andrew Strauss, playing his first game of the tournament, for seven.
There was some brief excitement near the end when Andrew Symonds (28 not out) was caught by Pietersen on the boundary. After taking five steps inside the ropes the fielder stepped over and the batsman was given not out.

TITLE: Protest Marks 4 Years of U.S. Occupation
AUTHOR: By Lauren Frayer
PUBLISHER: The Associated Press
TEXT: BAGHDAD — Tens of thousands draped themselves in Iraqi flags and marched peacefully through the streets of two Shiite holy cities Monday to mark the fourth anniversary of Baghdad’s fall. Demonstrators were flanked by two cordons of police as they called for U.S. forces to leave, shouting “Get out, get out occupier!” 
Security was tight across Iraq, with a 24-hour ban on all vehicles in Baghdad starting from 5 a.m. Monday. The government quickly reinstated the day as a holiday, rescinding its weekend order that had decreed that April 9 no longer would be a day off.
The Najaf rally was ordered by Muqtada al-Sadr, the powerful Shiite cleric who a day earlier issued a statement ordering his militiamen to redouble their battle to oust American forces, and argued that Iraq’s army and police should join him in defeating “your archenemy.”
Demonstrators marched from Kufa to neighboring Najaf, 100 miles south of Baghdad. Those marching were overwhelmingly Shiite, but Sunnis — who are believed to make up the heart of Iraq’s insurgency — have also called for an American withdrawal.
Some at the rally waved small Iraqi flags; others hoisted a giant flag 10 yards long. Leaflets fluttered through the breeze reading: “Yes, Yes to Iraq” and “Yes, Yes to Muqtada. Occupiers should leave Iraq.”
“The enemy that is occupying our country is now targeting the dignity of the Iraqi people,” said lawmaker Nassar al-Rubaie, head of al-Sadr’s bloc in parliament, as he marched. “After four years of occupation, we have hundreds of thousands of people dead and wounded.”
A senior official in al-Sadr’s organization in Najaf, Salah al-Obaydi, called the rally a “call for liberation.”
“We’re hoping that by next year’s anniversary, we will be an independent and liberated Iraq with full sovereignty,” he said.
Al-Sadr did not attend the demonstration, and has not appeared in public for months. U.S. officials say he left Iraq for neighboring Iran after the Feb. 14 start of a Baghdad security crackdown, but his followers say he is in Iraq.
Iraqi soldiers in uniform joined the crowd, which was led by at least a dozen turbaned clerics — including one Sunni. Many marchers danced as they moved through the streets.
The demonstration ended without violence after about three hours, but two ambulances could be seen moving slowly with the marching crowd, poised to help if violence or stampedes broke out.
Colonel Steven Boylan, a U.S. military spokesman and aide to the commander of all U.S. forces in Iraq, praised the peaceful nature of the demonstration, saying Iraqis “could not have done this four years ago.”
“This is the right to assemble, the right to free speech — they didn’t have that under the former regime,” Boylan said. “This is progress, there’s no two ways about it.”
Monday’s demonstration marks four years since U.S. Marines and the Army’s 3rd Infantry Division swept into the Iraqi capital 20 days into the American invasion.
Foreign Minister Hoshyar Zebari said Monday that “mistakes were made” after Saddam Hussein’s regime was ousted four years ago.
“The main mistake was a vacuum left in the fields of security and politics, and second mistake was how liberating forces became occupation forces,” Zebari told Al-Arabiyah television.
Cars were banned from Najaf for 24 hours starting from 8 p.m. Sunday, said police spokesman Colonel Ali Jiryo. Buses idled at all entrances of the city to transport arriving demonstrators or other visitors to the city center. Najaf residents would be allowed to drive, he said.
In a statement distributed in Najaf on Sunday, al-Sadr called on Iraqi forces to stop cooperating with America. 
“You, the Iraqi army and police forces, don’t walk alongside the occupiers, because they are your archenemy,” the statement said. 
Al-Sadr, who commands an enormous following among Iraq’s majority Shiites and has close allies in the Shiite-dominated government, urged his followers not to attack fellow Iraqis but to turn all their efforts on American forces. 
“God has ordered you to be patient in front of your enemy, and unify your efforts against them — not against the sons of Iraq,” it said. 
Al-Sadr had reportedly ordered his militia to disarm and stay off the streets during the Baghdad crackdown, though he has nevertheless issued a series of sharp anti-American statements, demanding the immediate withdrawal of U.S. troops. 
Sunday’s statement was apparently issued in response to three days of clashes between his Mahdi Army militiamen and U.S.-backed Iraqi troops in Diwaniyah, 80 miles south of Baghdad. 
A U.S. soldier was killed there Sunday, Colonel Michael Garrett, with the U.S. Army’s 25th Infantry Division, told reporters in Diwaniyah on Monday as American troops continued operations.

TITLE: Tarantino-Rodriguez Movie Bombs at U.S. Box Office
PUBLISHER: Reuters
TEXT: LOS ANGELES — Bad-boy directors Quentin Tarantino and Robert Rodriguez fell victims to a box office bloodbath on Sunday as their ambitious double feature “Grindhouse” bombed during its first weekend of release. 
The three-and-a-quarter hour film — actually a package of two movies honoring the low-budget horror movies of the 1970s — opened at No. 4 with three-day ticket sales of just $11.6 million, distributor Dimension Films said. Box office forecasters had expected it to hit the $20 million level.
“Are we disappointed about the gross?” studio co-chairman Harvey Weinstein told Reuters. “I’d be lying to you if I said I wasn’t. I am disappointed.”
The $53 million project consists of Rodriguez’ zombie thriller “Planet Terror” and Tarantino’s slasher picture “Death Proof,” complemented by ersatz trailers and scratchy prints that give a period feel to the undertaking.
Critics raved but moviegoers were evidently underwhelmed, opting to give the Will Ferrell ice-skating comedy “Blades of Glory” a second weekend at the top with sales of $23 million. Weinstein said the public is always demanding new moviegoing experiences, “and then it takes a while to educate them.”
“What Robert and Quentin did was a very noble attempt to re-educate American cinema-goers as to what’s good and what was great about seeing those old double bills,” Weinstein said. “They tried and the story’s not written in one week when you do something this bold.”
The movies will be released individually overseas, beginning May 31, and Weinstein said “it’s certainly something we could consider” for North American moviegoers, although there are no current plans for such a reissue.
Dimension is a unit of the Weinstein Company, which Harvey and brother Bob launched in 2005 after they left Miramax Films. The studio has struggled to find its footing at the box office. But the Weinsteins said “Grindhouse” would be a financial success after foreign and DVD sales are included.
“Grindhouse” was one of four new entries vying for the attention of moviegoers over the Easter holiday.

TITLE: White Mouse Traps Jumbo
PUBLISHER: Reuters
TEXT: HANOI — A small white mouse running around a Boeing 777 delayed a Vietnam Airlines flight to Tokyo for more than four hours, newspapers reported on Monday. 
A passenger saw the mouse on the aircraft, which had arrived in Hanoi from the central city of Danang at 10 p.m. on Saturday and was scheduled to continue to Japan.
“Technicians were sent to seek and kill the mouse on the Boeing and this task lasted for more than four hours,” according to one report in the online newspaper VietnamNet www.vnn.vn.
The report and others in state-run newspapers said the passengers went to a hotel and luggage was removed during the search for the mouse.
The rodent was found early on Sunday and the aircraft took off at 4 a.m.
Vietnam Airlines employees said they suspected that a passenger brought the mouse onto the plane and it escaped.

TITLE: Staying a Step Ahead of the Pack
AUTHOR: By Evgenia Ivanova
PUBLISHER: Staff Writer
TEXT: Summer doesn’t seem to be in a hurry to arrive in St. Petersburg. But with snow still flying around the Northern Capital, the city’s fashionistas have one significant advantage — next season’s fashions or elements from them can be worn right away. The St. Petersburg Times investigates what they might be.
Having appeared at the world’s most important fashion weeks in Milan, Paris and London earlier this year, the fall/winter collections for 2007-2008 have finally come to Russia’s catwalks. With both Moscow’s fashion weeks over and the local Defile na Neve ending on April 16, what the future of fashion holds has become less of a secret.
Fashion for winter 2008 features subdued colors, fitted silhouettes, eclecticism in a combination of fabrics and prints with references to surrealism and the simple geometry of suprematism.
According to Frol Burimsky, fashion-coordinator for the St. Petersburg-based chain of multibrand boutiques Vanity, “if, in this season, the trends were very clear, it will be harder to define them for the coming winter.”
“But overall, there is an urge to make collections simpler and more casual and the lack of the complicated elements that were used in the collections of spring-summer 2007 — metal corsets, plastic materials, and the like,” Burimsky said.
“A new surprising trend is the emergence of Lurex in knitwear and accessories in men’s collections. This fabric is not usually used in men’s clothing at all,” he told the St. Petersburg Times.
According to St. Petersburg designer Alexandra Kiabi, who took part in Russian Fashion Week in Moscow and will take part in Defile na Neve on April 13, her new collection is “a refined metaphor, that allows the fantasies concealed deep in one’s mind to be expressed and extra charm to be added to an object of art called life.”
Another participant of the fifteenth season of Defile na Neve, Andrei Rudakov, taking his lead from Shakespeare, maintains that our life is a play. In his new collection, called “The Geometry of Pacifism,” he attempts to connect “inspiration and the victim, love, struggle, light and darkness and steel and lace.”
Simplicity and elegance is in vogue again and, according to the latest news from the world’s catwalks, designers’ love affair with futurism, with its shiny plastic and slippery latex, was rather short-lived. 
Firstly, this was because the glittery extravaganza with second-hand references to the space age wasn’t wearable enough, and therefore, didn’t make it a hit from a commercial point of view. It was hard to look cool when attempting tight silver trousers, sparkling corsets and shimmery mini-dresses — these outfits only looked good on their hangers. 
As for romanticism, another main trend of spring/summer 2007, its various interpretations will remain a current trend in winter. 
During the previous season designers were busy working on flowery topics, now many are exploring the use of bows. But in many collections it was taken out of all proportion and became the main element of the designs. 
A silver ribbon with large bow provides an alternative to a coat belt in the women’s collection of Tatyana Alehina. Vivienne Westwood, whose designs could also be seen at the Russian Fashion Week in Moscow earlier this month, also paid attention to this frivolous element. She decorated the veil of her wedding dress with a massive bow. And St. Petersburg-based Leonid Alexeev played with it too, taking a sport-meets-elegance aesthetics to the next level. In his new men’s collection he suggests wearing a white bow tie with a leopard-skin shirt, gray sporty trousers and white trainers.
Overall, the collections on offer for fall/winter 2007-2008 seem to be more tranquil. 
Everyone strives for balance and harmony and if summer’s fashion were full of complexity, designers now seem inclined to calm down and make more peaceful collections for the quieter season of winter, Burimsky of Vanity boutiques said.

TITLE: A New Center for Skin Care
AUTHOR: By Yekaterina Dranitsyna
PUBLISHER: Staff Writer
TEXT: L’Oreal Cosmetique Active distribution company opened its first Skin Health Center in the Petropharm drugstore on Nevsky Prospekt last month. 
Managers are hoping to repeat the success of their Moscow center that opened last year and significantly increased sales of dermocosmetics. 
Apart from the distribution of specifically dermocosmetic products, which customers will be able to try and scrutinize, the center will offer free skin diagnostics services and consultations from pharmacists. Regular customers will be offered medical cards to monitor skin health and the results of the treatment.
“An environment like this is ideally suited to the promotion of dermocosmetics. The center has been designed in a medical-like way with dermatologists and pharmacists on hand to serve the customers,” said Yekaterina Lazareva, head of the department for the management of product categories at L’Oreal Cosmetique Active.
The center will distribute three brands — Vichy, La Roche-Posey and Inneov. Lazareva said the project was unique, unifying the traditions of one of the oldest drugstores in the city, at Nevsky 22, and the long history of world-famous brands.
“We were the first drugstore in the city that started to sell dermocosmetics. At that time we just sold the Vichy brand,” said Vera Protsenko, director of the drugstore, a part of Petropharm chain.
An initial three million rubles was invested into the center, Lazareva said. However spending could increase as the company plans to install a new computer program for skin diagnostics.
The strategy of opening skin health centers in large drugstores has proved successful for Vichy across Europe. Now the brand is launching similar projects in Russia. A similar center has been operating in Moscow for about a year, Lazareva said, where sales increased almost fourfold.
According to the latest survey by the PharmExpert marketing research center, in the first half of 2006 Vichy dominated the Russian dermocosmetics market with a 62.1 percent share, followed by Lierac (9.8 percent) and La Roche-Posey (4.6 percent).
The Russian dermocosmetics market as a whole was estimated to be worth 52.6 million euros in the first half of 2006 — a 31 percent increase on the same period of 2005.
The shopping format launched by Vichy and Petropharm accords with Russian consumer preferences.
According to a survey released by the ACNielsen marketing agency this week, Russia is the sixth most important consumer of cosmetics, hygiene and beauty products. 87 percent of Russians regularly buy hygiene and beauty products (75 percent of men and 99 percent of women).
ACNielsen surveyed 46 countries. In terms of consumption only Spain, Thailand, Hungary, Philippines and Mexico use more.
In Russia 78 percent of consumers buy hygiene and beauty products in drugstores, 65 percent — in specialized stores, 47 percent — in supermarkets.
According to the survey, 58 percent of Russians believe in a brand’s promises.
“In Russia price is not generally the least important consideration for buyers, but in terms of hygiene and beauty products Russian customers are more influenced by the recommendations of friends and a brand’s seductive ‘promises,’” said Alexander Pismenny, general director of ACNielsen Russia.
The advice of friends is important for 62 percent of Russians, the brand “promise” for 58 percent. 49 percent of respondents said they buy their own “favorite” brands. 49 percent of Russian buyers consider price the most important factor while 48 percent trust the advice they read in glossy magazines. 
29 percent of Russians pay attention to free testers. Testers are more important for women (39 percent) than men (17 percent). Women are more loyal to brands (56 percent) than men (40 percent).
28 percent of Russian consumers believe that premium brands of hair care products have advantages compared to mass-market trademarks. 34 percent believe in premium skin care products, 35 percent — in premium makeup.

TITLE: All That Glitters…
TEXT: Called “Gold and Silver Jewellery: The Transformation of a Tradition in the 20th Century,” the new display traces the path art jewellery has taken during the past century. 
The collection on display bridges the art and craft of jewellery making by showcasing more than 100 artefacts from the collection of the Montreal Museum of Fine Arts by some of the world’s finest artists. 
The display’s star item is a gold chess set designed by surrealist artist Salvador Dali. 
Bracelets, brooches, collars, rings and figurines designed by renowned jeweller Cartier and glassware legend Rene Lalique, as well as by some of the biggest names in the international art scene, including French artist Pablo Picasso and Italian sculptor Bruno Martinazzi, are also on display.
The most recently made items in the exhibition were created from less noble materials than gold or silver. 
Modern artists opt for plastic, paper, iron rods, fabric and even fishing line.

TITLE: Vodka Improves Health?
AUTHOR: By Maria Antonova
PUBLISHER: Special to The St. Petersburg Times
TEXT: “This drink has a magical power,” he wrote. “It strengthens the weak, and revives those who have fainted. Those tired after work and physical activity can return their life forces by this drink much sooner than by nourishment. … It works as a diuretic, an appetizer, an antitoxin…”
More than two centuries later, the health sections of Russian bookstores feature such titles as “Vodka Therapy,” “Curing with Vodka. Fabulous Recipes for the Cure,” “Therapy with Vodka and Moonshine” … the list goes on. And these are all titles that were published last year.
When it first appeared in Russia, the word “vodka” was used to describe medicinal tinctures that were sold in apothecaries. Vodka can still be used as a disinfectant, since it is essentially diluted alcohol, said Valery Myakin, head doctor in Moscow’s Narkolog rehabilitation center. When doctors or medical supplies are not within reach, vodka might be a more readily available alternative to treat a wound.
Another way to use vodka externally is in cases of high fever. Myakin confirmed that since alcohol evaporates faster than water, a fever could be reduced by rubbing vodka onto a patient’s body.
Controversies about the supposed health benefits of vodka mostly revolve around drinking it, but even Myakin said that up to 50 grams of vodka a day can actually be beneficial: “Small amounts of quality vodka can help prevent atherosclerosis,” he said. “Unfortunately, few people stop at that, since our drinking traditions have been totally distorted.”
In January, Narkolog and other such centers were overflowing with clients who had evidently overmedicated themselves during the winter holidays.
Ironically, the popular books list vodka recipes for curing alcoholism. All you have to do, as one of them says, is: “Get five to seven green forest bugs and let them sit in a glass of vodka for several days. Give the infused vodka to the patient without telling him what it is.” That concoction is supposed to turn the “patient” off from alcohol for good.
Another widespread myth states that knocking back a few drinks helps “disinfect” your body after swimming in a polluted river or eating dubious food. It seems that some people perpetuate myths of alcohol’s benefits to find yet another reason to toast one another.

TITLE: Locals Have Spas in Their Eyes
AUTHOR: By Yelena Andreyeva
PUBLISHER: Special to The St. Petersburg Times
TEXT: Over the last few years, the word “spa” has become very popular in Russia as a synonym for the way wealthy and successful people relax. 
However, many Russians still have a very vague impression of what a spa really is. Some of them use it to mean a beauty salon, others consider that a true “spa-salon” can exist only as part of a magnificent spa resort situated on the sea.
As is often the case, the truth is somewhere in between. In Russia spa services have been available at resorts for more than 200 years, based on a traditional medical approach, while the spa business abroad is more focused on giving pleasure to its clients who go in search of a little rest, relaxation, and peace and harmony, which emotionally enhance their experience.
According to the International Spa Association’s classification there are various types of spas, such as day spas, hotel resort spas, spa resorts and destination spas, medical spas, and even cruise spas. 
In Europe, day spas are usually situated in cities, offering a wide range of spa services that can provide for up to 300 clients at a time. 
“Day spas abroad are well-organized places where everything is done to help a client relax,” said Nina Tsymbal, business and development director of the consulting company Endeli Limited. “There you can find everything you need, even down to ‘spa cuisine,’ only there is no accommodation available.”
Unlike resort spas, which are simply parts of hotel complexes and on a par with the many other facilities that a luxurious hotel must have, spa resorts are built to accommodate tourists who go there only to enjoy spa services.
According to Endeli Limited, with spas appearing at resort and hotel properties worldwide at a remarkable rate, the spa industry has become a major draw in the hospitality sector. The latest global trend suggests that guests often prefer hotels with spa services, rather than with outdated fitness studios or simple saunas. While day spas lead in the U.S. and Europe, resort/hotel spas have grown tremendously and account for the second largest spa group. For example, customers in the U.K. prefer hotel/resort spas to other kinds of spas. 
Although, as spa experts say, the development of spas is a clear trend in the hotel industry, and it would now be almost unthinkable to open an upscale hotel without spa facilities, hotel managers often do not understand the essence of the spa business and are rather skeptical about the profitability of hotel spas. 
“It is really unthinkable that a new five-star hotel opening in St. Petersburg does not have spa facilities. In Western countries, it just would not fall into the luxury hotel category,” Tsymbal said.
However, some hotel owners and spa operators are fast realizing that it is necessary to have a spa to meet guests’ expectations and to remain competitive. 
“The more closely the spa is integrated into the hotel’s structure, organization, marketing and management, the higher its profit potential. By further integrating spa services into their operating structure, hotels will be reminded of their mission of providing comfort to their clientele and will offer more in-room and in-suite treatments,” Tsymbal said. 
Thomas Noll, general manager of St. Petersburg’s Grand Hotel Europe, where the Beauty Planet beauty salon and spa opened in 2006, shares Tsymbal’s opinion. 
“To go to a spa today is no longer something special for ladies and gentlemen who are successful in business and in life — it is rather a part of the life style. Just as one occasionally goes to a restaurant or to the cinema, one goes to a spa. It is about feeling good, looking good and being successful,” he said.
But a Hotel Spa Survey, recently undertaken by Small Luxury Hotels, shows that typically,  guests book at least one treatment during a weekend break and three during a weeklong stay. More than a third of guests surveyed (36 per cent) said they spend more on spa therapies than on fine dining and wines.
Spas usually cater for clients over 35 years old who prefer to take care of their bodies passively at spas than actively at gyms. Therefore, one of the main purposes of spa managers is to protect their clients from either physical or emotional disturbance within the walls of their spa salon. “When designing a spa, it is important to optimize the layout of the available space in order to avoid any external and internal noise, crowding of communal areas or any factor that could spoil the overall experience,” said Michael Walsh, the general manager of St. Petersburg’s Astoria Hotel. “Most guests visiting our spa are looking for an escape from the stress of busy city life. We are pleased to offer an exclusive holistic environment, where one can relax, rejuvenate and re-energize.”
In order to provide a relaxing environment, children are prohibited at some foreign spas. However this created the opportunity for other spas to change their focus to serve children and teenagers. 
“Spa services for all ages prevail at spa resorts where families usually go. It is a very wise business approach because, in such a way, spa resorts create new clients who are accustomed to taking care of their health with the help of spa treatments from an early age and, most likely, they will not give it up for the rest of their lives,” Tsymbal said.
However, as in many other areas of business, the Russian spa industry has taken its own path. Although there are lots of mini beauty salons that are called “spa studios” around St. Petersburg, only a dozen of them are considered by experts to be true spa salons. And in cities like St. Petersburg the word “spa” has an additional connotation — some mini spa salons are brothels.
To avoid such a misinterpretation and gather together spa specialists to share their experiences, the first international spa event, Saint-Petersburg SPA Salon 2007, will be held at Lenexpo in St. Petersburg on May 22-25.
One of the formidable obstacles in the way of the development of the spa industry in Russia is the high price of spa services. “Surveys conducted in Germany showed that most customers are ready to pay for their relaxation at resorts but their willingness depends on the price. In Russia, where in the Soviet era many people were in the habit of getting treatments at state-run sanatoriums for free or for very little money, attitudes to paying can be a problem,” said Nikita Savoyarov, a local tourism expert. And as long as spa services cost 60-80 euros per hour, they will only be in demand from wealthy clients. Tsymbal said that the services of a good spa salon cannot cost less because the cosmetics they use are expensive.