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Press review: Russia reinforces border and US’ anti-Nord Stream 2 crusade proven futile

Top stories in the Russian press on Friday, April 9

Kommersant: Biden administration to ramp up pressure on Moscow

The Biden White House is going to impose new sanctions against Russia. According to US media reports, they will affect people close to President Vladimir Putin. Washington is also setting its sights on expelling a group of Russian diplomats and taking a swipe at the Nord Stream 2 gas pipeline, by appointing a special envoy to coordinate work on sabotaging the pipeline. Moscow is making it clear that the answer will be tough, Kommersant writes.

According to American press reports, various options are being looked at. Sanctions may be imposed against state agencies responsible for Moscow’s alleged interference in the elections and people close to the Russian head of state. In addition, intelligence officers working under diplomatic cover might be booted from the US.

Program Director of the Russian International Affairs Council Ivan Timofeev explained in an interview with Kommersant that Washington’s measures will most likely not be too significant, they will affect specific security officers but not the economy, still this will push the ruble down. "The current events are superimposed over the heightening of tensions in Donbass, which are predictably raising concerns among market players," he noted. Restrictive measures against Russian telecom companies would be the most dangerous, the expert suggested.

Meanwhile, if Russian diplomats are once again expelled from the United States as a punitive move, the answer may not necessarily be proportional, Kommersant writes. Moscow has long been unhappy with the diplomatic imbalance between the Foreign Ministry and the State Department. The Americans cannot get Russian visas for their employees, and that not only affects diplomats but technical personnel as well. Moreover, sources from the Russian side tell Kommersant that Russia has the same problem.


Nezavisimaya Gazeta: Russia strengthens border amid escalating tensions in Donbass

Kiev says that it is undesirable to expand military scenarios in Ukraine’s southeast, but tensions near the border in Crimea and Donbass are on the rise. Over the past day, exchanges of mortar fire have been reported in the suburbs of Donetsk and on the outskirts of Lugansk. Kiev is utilizing 120-mm mortar shells prohibited by the Minsk agreements. What is occurring now can only heighten Moscow’s concerns, Nezavisimaya Gazeta writes. Although the leadership in Moscow has stated that it does not plan on intervening in the conflict in Ukraine, the Russian Ministry of Defense is beefing up its troops and naval forces in the southwestern strategic direction.

The seriousness of such intentions is demonstrated, for example, by the official announcement of the Russian military that active maneuvers are taking place throughout Russia, according to the newspaper. At the same time, the press gives priority attention to drills and assessment sessions, along with multi-kilometer marches that are happening in the regions bordering Ukraine.

Military expert Lieutenant General Yuri Netkachev told Nezavisimaya Gazeta, "such large-scale transfers of troops and naval forces are taking place not only in the western part of the country but also throughout Russia", they are all planned, that is, they are not associated with the recent intensification of the conflict situation in Donbass. "Nevertheless, there is no doubt that Russia has adequately assessed the situation. … Our military leaders admit the possibility of Kiev's military aggression in Donbass and Crimea," Netkachev added. In this regard, strengthening the Black Sea Fleet in the south of the country, in his opinion, clearly does not do any harm.

Chairman of the All-Russian Trade Union of Military Personnel, Captain 1st Rank Oleg Shvedkov shares a similar opinion. He told the newspaper, it is most likely that "landing boats will be transferred from the Caspian to the Black Sea."


Izvestia: Washington’s crusade to undermine Nord Stream 2 proving to be futile

More of Washington’s sanctions threats are an attempt to drive Europe into ditching the Nord Stream 2 project, according to experts interviewed by Izvestia. But the US will not be able to stop the gas pipeline’s construction, since the EU realizes its importance for Europe’s energy security, experts believe. Kremlin Spokesman Dmitry Peskov said that the project’s partner countries are consistent in their intention to complete it. As a last resort, to bypass any possible new sanctions, Nord Stream 2’s construction company may carry out the necessary work through subsidiaries, analysts said, adding that the pipeline will most likely be completed in 2021.

"Pipe-laying works are in progress, and the United States understands that it cannot stop it with its sanctions. So now we see that they are trying to put pressure on the Europeans. If the EU voluntarily imposes sanctions, there is nothing you can do about it," Igor Yushkov, an expert from the Russian Government's Financial University, told the newspaper.

According to the commentator, Washington is unlikely to be able to force Europe to impose official sanctions against the pipeline and disrupt its construction, since the EU understands its significance. This project is crucial for Germany since the low cost of Russian gas increases the efficiency of German industry, leading analyst at QBF Oleg Bogdanov pointed out. The implementation of Nord Stream 2 will enable Germany to become the largest European gas hub and will provide an opportunity to control the price situation on the fuel market, he added.

Threats of tougher sanctions against the Nord Stream 2 operators are unlikely to be fulfilled, Alpari’s Anna Bodrova told the newspaper. So far, the details about the new restrictions from the US are unknown, but in such situation, it is quite hard to concoct sanctions that simultaneously do not lead to a significant deterioration of US-German relations and can halt or significantly delay the pipeline’s completion, Finam analyst Sergey Kaufman believes.


Izvestia: Russia’s Sukhoi Superjet 100 becomes more attractive to buyers

The Superjet 100 has new potential customers in Russia, but they cannot expect delivery of these aircraft until the end of 2022 at the earliest, Angara Airline CEO Sergey Salamatov told Izvestia. The carrier is interested in the SSJ-100, but it has not yet begun negotiations with the Irkut corporation, that is, the jet’s manufacturer. Two more Russian airlines are already hashing over buying the SSJ-100 with Irkut, a source in the aviation industry told Izvestia.

"Not a single new airline can receive the SSJ-100 before the end of the year. All deliveries have already been scheduled between the existing operators. We understand that if we submit an application tomorrow, then only by the end of 2022 will it be possible that they will deliver something to us," Salamatov told the newspaper.

In early April, the Ministry of Industry and Trade, GTLK, and Aurora signed a schedule for the delivery of Irkut’s aircraft, including the Superjet 100. A source familiar with the deal told Izvestia that eight SSJ-100s will be delivered to the carrier up till 2024.

This interest in the jet was influenced by the expansion of measures to support it, including compensation for maintenance and leasing costs, as well as an ongoing regional transportation subsidy program, Alla Yurova from the National Rating Agency told the newspaper.

State support measures make the SSJ-100 more attractive than foreign-made rivals, and the quality of service is gradually being raised to a level where the aircraft can be used quite intensively, Executive Director of the AviaPort agency Oleg Panteleev believes.


Kommersant: Russia unlikely to repeat 2019 oil output record

Oil production in Russia amid depleting fields and higher taxes may enter into a steady decline and will never exceed the level reached in 2019, according to the draft general plan for the development of the oil industry in Russia until 2035, put together by the Ministry of Energy. The plan also outlines more favorable scenarios, but they all assume a gradual decline in production. According to analysts interviewed by Kommersant, the key factor in this matter will be state policy, which can achieve a comfortable level of production by changing the tax burden.

The general draft plan contains several key scenarios of production dynamics under the assumption that the current OPEC+ deal will end in 2022. All scenarios assume a gradual decline in production after a peak in 2027-2029, although in some scenarios the peak occurs earlier. The difference between the scenarios is mainly which stocks were taken into account. The gradual easing of the tax burden was also considered, but there is no indication by how much.

Beginning around 2010, many analysts expected production in Russia to begin to decline due to the high depletion of fields, Dmitry Marinchenko from Fitch told Kommersant. However, until Russia joined the OPEC+ agreement, this did not happen - production grew slightly, he noted. The analyst believes that the state can largely control output. If it starts to decline, the government is likely to try to reverse the trend by lowering taxes. In his opinion, it is more likely that after the OPEC+ deal is finished, Russia will reach approximately the level seen in 2019, and then the output will either stagnate or even grow due to such promising projects as Vostok Oil from Rosneft. According to the analyst, given the energy transition in Russia, it is more profitable to maximize production in the mid-term through tax incentives than to leave oil in the ground.


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