Press Review: Battle of Aleppo takes U-turn and Russia eyes raising oil suppliers’ taxes

Kommersant: Assad’s forces turn tide in fight for Aleppo

The Battle of Aleppo, raging since 2012, has finally taken a U-turn, as Syrian government forces backed by pro-Iranian Shiite militias captured several key areas in the militant-controlled eastern part of the city. According to the experts, interviewed by Kommersant, the Syrian authorities will try to wrap up the military operation in Aleppo before the new President of the United States takes office.

According to military experts, if the government troops’ offensive could operate at the same pace, they would be able to establish full control over the city before the end of the year. Should the assault be completed successfully, Assad will significantly solidify his position in any peace negotiations, as he will control the country’s five largest cities - Damascus, Aleppo, Homs, Hama and Latakia, Kommersant wrote.

Experts interviewed by Kommersant believe that the timing of the assault is not accidental - the Syrian authorities and their allies (Russia and Iran) seek to achieve maximum success in Aleppo before President-elect Donald Trump steps into the Oval Office compelling him to face a fait accompli - the opposition would have lost the battle for Aleppo.

"The goal of Assad, as well as Russia and Iran is to make the most of the two months between the presidential elections and the inauguration of the new administration," Director of the Center for Strategic Studies and analysis Russia-East-West Vladimir Sotnikov told Kommersant. "If by the end of January Aleppo is fully controlled by the government troops, Damascus will participate in the upcoming talks on Syria having the upper hand, and no one will dare talk about removing Assad from office," Sotnikov added.

Vedomosti: Finance Ministry eyeing to raise oil suppliers’ taxes

The Russian Finance Ministry hammered out a bill on raising the tax burden for the oil industry in 2018 by increasing the mineral extraction tax by 50 bln rubles ($771.82 mln). According to Vedomosti, this is the price for experimenting with added tax revenue that the industry had lobbied for.

All the new fields in Eastern Siberia, as well as some old ones in Western Siberia with a total production that does not exceed 15 mln tonnes will be able to switch to the added tax revenue (the rate is 50% of the income from sales minus the production and transportation costs, but no more than 9,520 rubles ($146.9) per tonne). Other fields will have to shoulder the increased tax burden. Exceptions include projects operating under a production sharing agreement, and ventures that received a zero rate of the mineral extraction tax, Chief Economist at Vygon Consulting Sergey Ezhov told the newspaper.

On the whole, oil companies declined to comment on the issue. Although the Finance Ministry has not responded to the newspaper’s request, a source in the Energy Ministry told Vedomosti that the two ministries disagree on the bill, but will iron out the issue in the near future.

An employee of a major oil company told Vedomosti, "Hiking the added tax revenue will in turn increase taxes on new fields, which companies planned to compensate in the old fields, but the Finance Ministry also takes that gain."

Director of Moscow Oil and Gas Center at Ernst & Young, Denis Borisov told the newspaper that the effect from added tax revenue on old fields will significantly depend on the project’s cost - those with higher costs will pay less tax, so the effect increases with the growth of oil prices.

Izvestia: Military vehicles to be equipped with cruise control to operate under any conditions

Russian tanks and missile tractors will soon be equipped with cruise control, which will allow them to operate in tough climatic conditions, even in a zero visibility environment, according to Izvestia.

This innovation was developed by the the Vasilevsky Military Academy of the Army Air Defense Corps. "At present, we have finished the simulation stage. This coming spring, together with the production sector insiders we will begin field tests of this latest creation," Head of the Vasilevsky Military Academy’s Department of Automated Command and Control Systems, Colonel Andrey Morozov, told Izvestia.

The new system is slated to be installed on missile tractors for the Buk and S-300 missile systems. "Later, if all goes well, the product can be put on any military vehicle that has a digital engine management system," Morozov told the newspaper.

Kommersant: Evraz ready to sell its Nakhodka Trade Sea Port

Evraz, looking to scale back its debt burden, has decided to sell the company’s port facilities in Nakhodka, Evraz NMTP (Nakhodka Trade Sea Port). According to two Kommersant sources, the asset valued at more than $260 mln, has already received about a dozen bids from Russian, Kazakh and Chinese companies.

Evraz has been looking for buyers for its terminals in the port of Nakhodka for several years now, a source told the newspaper. The port is a non-core asset for the company, and a potential deal would allow Evraz to scale down its debt burden (at the end of June - $5.3 bln), the source told Kommersant.

According to one of the newspaper’s sources in the industry, Evraz estimated Evraz NMTP at $275-300 mln. The source told Kommersant, there are already almost a dozen potential buyers, but the parties might not agree on the price. Evraz is not willing to sell the port at a depreciated price, but the hub’s high load and environmental complications might drive down the asset’s price.

Nadezhda Malysheva from PortNews told Kommersant that, despite the large number of interested companies, the actual demand for the asset might be lower. "Evraz NMTP is not remotely located, but within the city limits, creating social and environmental dilemmas. In addition, the load of the East-Nakhodka transport hub is extremely high due to the development of the Vostochny port terminals," the expert explained.

Izvestia: Fifty-two percent of nation’s consumers "buy Russian"

More than half of Russians look for the ‘made in Russia’ label when they go shopping, Industry and Trade Minister Denis Manturov wrote in an article for Izvestia.

"We see consumer activity shifting towards Russian goods. For every second Russian (52%) knowing that product was made in Russia influences the purchase," Manturov wrote.

According to the article, consumers’ preferences for domestically produced goods are largely an expression of consumer patriotism. "Our task is to make this trend more sustainable and more stable," the minister stressed.

Manturov also noted that consumer goods manufacturing is one of the few sectors to demonstrate growth. "According to the results for the nine months of 2016, the consumer goods manufacturing industry shows growth - leather footwear production rose 6.4%, textile and clothing industry jumped 4% year-on-year. Production increases in cotton and linen fabrics, knitwear and hosiery was particularly noticeable," the official noted.

According to Manturov, growth of the industry was possible thanks to last year’s anti-crisis measures, primarily interest subsidies on loans for working capital. "This is a much needed support tool, which attracted 42 companies, and the volume of subsidies exceeded 650 mln rubles ($10.03 mln)," he wrote.

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