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THERE IS NO FREE GAS FOR NABUCCO YET, FOR RUSSIA HAS CHARTERED THE WHOLE MIDDLE ASIAN GAS
By David Stepanyan
ArmInfo
2009-06-16 15:37:00
Exclusive interview with Sergey Grinyaev, Director General of the
Russian Stock Market Development Institute
Mr. Grinyaev, do you think that Ukraine's gas transportation system may
be finally transferred to Russia because of its constant insolvency? Is
the possible 5 years of transit 'ahead' the first step towards this?
What changes it will lead to in the relations of Russia and the
EU? Will it make Russia stricter to other 'gas clients', including
Armenia?
I don't think it may concern Armenia. The evaluation criteria applied
to Armenia are quite different since Armenia is a strategic ally
of Russia. As for Ukraine, it provides Gazprom with access to the
European market where the share of the Russian gas is nearly 30%. As
far as I know, the problem with Ukraine has not been settled yet and
the earlier promised Russian credit of $5 billion has not yet been
provided to it ether. In this context, experts predict another gas
crisis already in autumn.
How prospective is NABUCCO project? What hinders its construction
at present except Russia's unwillingness? Which of the projects is
more viable: NABUCCO or South Stream? Do you think their co-existence
possible?
It is rather difficult to evaluate the economic vi ability of these
projects at present. As long as the participants in the project are
coordinating their stands, the technical side of the projects is not
clear yet. Instead, it is evident that getting rid of the expenses
and risks connected with existence of transit states in the chain of
gas supply from Russia to Europe is of extreme importance now. It is
said to be no free gas for NABUCCO yet, for Russia has chartered the
whole Middle Asian gas. It is the key obstacle of NABUCCO so far. On
the other hand, there is also Iran and the insufficiently clear stand
of Azerbaijan regarding this project.
There is no full information on the White Stream project either. This
project may be united with NABUCCO if there is possibility of EU
control over Ukraine's gas transportation system. So any grounded
expert evaluation would be untimely so far.
Both Russia and Armenia declare about protection of budget social
expenditures. What safety factor needs a state to avoid inflation?
As for Russia, it has no safety factor actually. Russian president's
comments on the budget message were evidence of it: social items
may be significantly reduced. As regards inflation, in Russia it
is mostly artificial and stimulated through transfer of hundreds of
billions of dollars to international reserves, which is the actual
investing in the U.S. economy. Inflation in Russia is 10-15% just
due to this factor. The second reason is monopoly economics, which
does not control inflation either.
Do you think the terms of the Russia stabilization loan to Armenia
mutually advantageous given the possible changes of Libor? May Armenia
face problems with repayment of the loan and transfer enterprises or
resources in exchange (the right to development of uranium deposits,
Armenian NPP and others)?
It is a philosophic question. If one of the parties has agreed to
provide a loan despite experiencing hard times and the other party
takes it on preliminary coordinated terms, the contract is certainly
favorable to the both parties. Otherwise Armenia could search for a
loan on more preferential terms in the international financial market.
Is it reasonable for Russia to hedge oil prices through mutual funds
and, maybe, with involvement of the government?
Russian oil Urals is not listed at Russian stock exchanges and global
prices of this product are established in London. Nevertheless,
listing oil at the Russian exchanges requires no more than 10-15%
of total oil sold in Russia.
That is why mutual funds and stock prices of oil are, unfortunately,
incompatible things so far. It would be more correct to ask by
means of what stock exchange instruments oil deals can be hedged
if exchange trade is organized inside the country. The answer is
evident i.e. by mean of futures, options and related derivative
instruments. Various funds, including mutual funds do not prov
ide additional instruments. They just make it possible to properly
concentrate financial resources and get more profits reckoning with
the so-called 'fair prices' for assets. This is theoretically, but
practically, these funds take commissions, which reduce net profit. So,
it is necessary to think well before applying to such funds.
Crisis has provided the country with an opportunity to return strategic
enterprises privatized in hard 90s. Is it reasonable for Russia to get
advantage of such opportunity? Are there enough experienced economists
in the government?
Undoubtedly, it is not only possible but also necessary to get
advantage of such opportunity. It does not mean that national
enterprises will belong to the government forever. When the situation
in the market is stabilized, they can be set to sale but on different
better terms than in hard 90s. As for experienced economists, I cannot
judge the government staff. But there are few experienced economists
among Russian businessmen and the crisis has proved this since very
few businessmen managed to minimize their losses.
Thank you
From: Emil Lazarian | Ararat NewsPress
By David Stepanyan
ArmInfo
2009-06-16 15:37:00
Exclusive interview with Sergey Grinyaev, Director General of the
Russian Stock Market Development Institute
Mr. Grinyaev, do you think that Ukraine's gas transportation system may
be finally transferred to Russia because of its constant insolvency? Is
the possible 5 years of transit 'ahead' the first step towards this?
What changes it will lead to in the relations of Russia and the
EU? Will it make Russia stricter to other 'gas clients', including
Armenia?
I don't think it may concern Armenia. The evaluation criteria applied
to Armenia are quite different since Armenia is a strategic ally
of Russia. As for Ukraine, it provides Gazprom with access to the
European market where the share of the Russian gas is nearly 30%. As
far as I know, the problem with Ukraine has not been settled yet and
the earlier promised Russian credit of $5 billion has not yet been
provided to it ether. In this context, experts predict another gas
crisis already in autumn.
How prospective is NABUCCO project? What hinders its construction
at present except Russia's unwillingness? Which of the projects is
more viable: NABUCCO or South Stream? Do you think their co-existence
possible?
It is rather difficult to evaluate the economic vi ability of these
projects at present. As long as the participants in the project are
coordinating their stands, the technical side of the projects is not
clear yet. Instead, it is evident that getting rid of the expenses
and risks connected with existence of transit states in the chain of
gas supply from Russia to Europe is of extreme importance now. It is
said to be no free gas for NABUCCO yet, for Russia has chartered the
whole Middle Asian gas. It is the key obstacle of NABUCCO so far. On
the other hand, there is also Iran and the insufficiently clear stand
of Azerbaijan regarding this project.
There is no full information on the White Stream project either. This
project may be united with NABUCCO if there is possibility of EU
control over Ukraine's gas transportation system. So any grounded
expert evaluation would be untimely so far.
Both Russia and Armenia declare about protection of budget social
expenditures. What safety factor needs a state to avoid inflation?
As for Russia, it has no safety factor actually. Russian president's
comments on the budget message were evidence of it: social items
may be significantly reduced. As regards inflation, in Russia it
is mostly artificial and stimulated through transfer of hundreds of
billions of dollars to international reserves, which is the actual
investing in the U.S. economy. Inflation in Russia is 10-15% just
due to this factor. The second reason is monopoly economics, which
does not control inflation either.
Do you think the terms of the Russia stabilization loan to Armenia
mutually advantageous given the possible changes of Libor? May Armenia
face problems with repayment of the loan and transfer enterprises or
resources in exchange (the right to development of uranium deposits,
Armenian NPP and others)?
It is a philosophic question. If one of the parties has agreed to
provide a loan despite experiencing hard times and the other party
takes it on preliminary coordinated terms, the contract is certainly
favorable to the both parties. Otherwise Armenia could search for a
loan on more preferential terms in the international financial market.
Is it reasonable for Russia to hedge oil prices through mutual funds
and, maybe, with involvement of the government?
Russian oil Urals is not listed at Russian stock exchanges and global
prices of this product are established in London. Nevertheless,
listing oil at the Russian exchanges requires no more than 10-15%
of total oil sold in Russia.
That is why mutual funds and stock prices of oil are, unfortunately,
incompatible things so far. It would be more correct to ask by
means of what stock exchange instruments oil deals can be hedged
if exchange trade is organized inside the country. The answer is
evident i.e. by mean of futures, options and related derivative
instruments. Various funds, including mutual funds do not prov
ide additional instruments. They just make it possible to properly
concentrate financial resources and get more profits reckoning with
the so-called 'fair prices' for assets. This is theoretically, but
practically, these funds take commissions, which reduce net profit. So,
it is necessary to think well before applying to such funds.
Crisis has provided the country with an opportunity to return strategic
enterprises privatized in hard 90s. Is it reasonable for Russia to get
advantage of such opportunity? Are there enough experienced economists
in the government?
Undoubtedly, it is not only possible but also necessary to get
advantage of such opportunity. It does not mean that national
enterprises will belong to the government forever. When the situation
in the market is stabilized, they can be set to sale but on different
better terms than in hard 90s. As for experienced economists, I cannot
judge the government staff. But there are few experienced economists
among Russian businessmen and the crisis has proved this since very
few businessmen managed to minimize their losses.
Thank you
From: Emil Lazarian | Ararat NewsPress