Russia to Soft-pedal on Oil Exploration

Russia’s remote regions could become alive with access by foreign companies to explore oil in order to avoid the possible decline in oil, gas and mineral extraction.

They may be allowed to co-developing onshore deposits of federal importance, the Russian Natural Resources Minister Sergey Donskoy told a news-conference. He explained deposits in the Far East and Eastern Siberia will be first.

The initiative concerns all kinds of mineral resources except of those on the continental shelf, the Russian Deputy Minister of Natural Resources, Denis Khramov, told the Vedomosti daily.

In current Russian law, oil and gas deposits of national importance are those having 70mn tones of oil and 50bcm of gas. The list of those deposits was outlined in 2008. Ever since, only two Russian majors, Gazprom and Rosneft, have had access to sea deposits, while the right to develop fields were put up for auction with the limited list of bidders.

The access of foreign investors to such deposits was restricted four years ago; they have to get government approval to have more than 10% of the company developing deposits of federal importance.

The Russian Ministry of Natural Resources expects oil production in the country to considerably drop in the near future. In 2013 the decline is expected to reach 0.8% or 510 million tonnes. In order to change the trend and until the Arctic shelf can fill the gap, which is unlikely to happen until 2020, the ministry plans to propel onshore production.

It is hoped the initiative will have a major impact on ore extraction as well as oil and gas. Eastern Siberia and the Russian Far East are under-explored even though they have great potentials. If the initiative is approved by the government and the president, it could stimulate companies to develop the  area.

This will mark a turning point in Russia's Oil Industry and in Vladimir Putin's external rapport. The KGB 'guy' has always been skeptical of foreign investments and actions in Russia. Russia could simply be taking a leaf from China.

Russia to become Developed in Seven Years

Russia has been projected to become a developed country with low inflation, a sizable middle class, and much slower economic growth rates in just seven years according to a research report from Bank of America's Merrill Lynch.

Ironically the research argues that the country’s problems, such as a declining population, will become the catalysts for these changes and will actually drive the country to improvement in internal consumption.

“By the year 2020, Russia will turn into a developed country thanks mainly to its demographic problems,” the research by Vladimir Osakovsky of Bank of America Merrill Lynch suggests.

The Russian Ministry of Economic Development also supported this concept, Finmarket.ru reports. Economists believe that scarce human resources will force employers to compete for qualified workers. Hence higher salaries will boost internal consumption.

Experts of the Organisation for Economic Co-operation and Development however have disagreed with such a notion.

Russia and Cuba: Remembering the Cold War

Cuba's President, Raul Castro and Russia's Prime Minister, Dmitry Medvedev

Russia to lease eight jets worth $650 million to its Cold War- era ally Cuba and will partially write off the country's multi-billion-dollar debt owed during the Soviet-era under agreements signed during Prime Minister Dmitry Medvedev's visit to Havana.

Moscow will write off part of the $30 billion debt and will offer a 10-year refinancing plan for the remaining amount, according to the preliminary agreement, Russia's industry and trade minister Denis Manturov told reporters on the sidelines of the talks.

"There was an accumulated debt on loans allocated by the Soviet Union and we have now prepared an agreement that should undergo all the necessary procedures," he said.

Manturov said the final decision on debt settlement will be signed by the end of the year.

Russia will also lease three Ilyushin-96-400 long-haul jets, three AN-158 regional planes and two TU-204SM mid-range aircraft to Cuba under the agreements inked in the presence of Medvedev and Cuban leader Raul Castro.

Moscow will provide sovereign guarantees to a syndicate of Russian banks financing the deal, Manturov said.

Medvedev and Castro were seen chatting informally and broadly smiling during the ceremony. The Cuban leader greeted reporters in Russian.

Russia and Cuba enjoyed close relations during the Cold War which was between the Soviet Union and Washington over world hegemony and supremacy.

The volume of trade between the two countries last year was roughly $200 million. Oil companies from Russia, the world's largest energy exporter, are drilling into Cuba's offshore oil deposits which has also being of interest to the United States.

WTO: In search of a Future

All things tremble in the world as American economy shakes. The latest is the World Trade Organisation, a third tier financial cum economic organisation backing the Brettonwood institutions. The organisation admitted China in 2001 and Russia in 2011. It has controlled the destiny of the economy of most countries especially developing ones mostly in Africa alongside the World Band and IMF. The organisation is now in search of a future. More.