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Press Review: Russia may cut oil supplies to Belarus and US sends marines to Afghanistan

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Kommersant: Russia looking to cut oil supplies to Belarus in Q1 2017

Moscow is planning to curtail oil supplies to Belarus in the first quarter of 2017 from 4.5 mln tonnes to 4 mln tonnes after the sides failed to hammer out a solution to the gas dispute at the end of 2016, Kommersant writes on Monday citing sources familiar with the situation. Apparently, Moscow will go ahead with cutting oil supplies to force Minsk to pay off its $400 mln gas debt to Russia.

The Belarusian side has voiced discontent over this approach to Russian Deputy Prime Minister Arkady Dvorkovich, according to Kommersant. If the oil supplies remain at this level, Belarus may receive 16 mln tonnes of Russian oil instead of 18 mln tonnes by the year-end.

Minsk expects that the dispute with Moscow will be solved within the first quarter: the Belarusian authorities introduced new tariffs on transit of Russian oil through the country’s territory only for that period, the paper says.

Sources told Kommersant that Moscow and Minsk were close to reaching a compromise. Russia agreed to give Belarus a subsidy for customs duties for the Russian oil in the Belarusian budget while Minsk should pay off its gas debt in full. However, Belarus asked for more concessions, namely a loan, and in the end, no agreement was reached.

The latest consultations were held on December 28 and the next day Belarusian Deputy Prime Minister Vladimir Semashko said that he expected to strike a deal during the first quarter of 2017. He said major agreements were reached back in October, but then "something went down" and "a road map was not approved for implementation due to some reasons."

Vyacheslav Mischenko, Senior Vice-President of Argus Media, said this is not the first conflict over energy resources between the two countries, but all of them ended upon one scenario: both sides made concessions. The expert was confident that a political decision would be taken soon. He noted that oil supply cuts are disadvantageous for Belarus as this could result in a loss in revenues due to the down time at the plants and lower levels of processing. This is efficient leverage for Russia to make Belarus pay off the debt with a certain discount or another scheme, for example obtaining assets, like in the case with Beltransgaz, Mischenko explained.


Izvestia: US to deploy Marines to Afghanistan

For the first time since 2014, the United States is sending a large contingent of marines to Afghanistan. Several hundred members of the elite II Marine Expeditionary Force will be deployed to Afghanistan's southern Helmand province to take part in operations against the Taliban, and also act as instructors and advisers for the Afghan forces. Experts told Izvestia the decision to boost the contingent of US forces is an attempt by the Pentagon not to allow the Taliban to take revenge.

An expert at the Center for Contemporary Afghan Studies (CISA) and the head of the Eurasia Analytical Club, Nikita Mendkovich, believes that the situation in Afghanistan now is very difficult.

"There has been an increased activity by the Taliban who started seizing district and regional centers. They have to be forced out of there with the use of artillery and aviation," Mendkovich stated.

In an effort to stop this negative trend, the authorities in Kabul jointly with Americans plan to carry out a series of military operations in 2017 aimed at stabilizing the situation, he added.

The expert stressed that in order to improve the situation in Afghanistan there is the need to combine military efforts with political processes. "A tactical victory can be indeed reached there as the American units outmatch the Taliban and the Afghan army," he explained. "However, very often the American and Afghan forces liberate a territory but are unable to hold on to it."


Kommersant: Rosneft seeks to pull out of its only project in Algeria

Russia’s oil giant Rosneft is eyeing withdrawing from its geological prospecting project in Algeria, Kommersant business daily writes. According to its sources, the company will have to pay penalties and therefore Rosneft will likely try to sell its share to its Algerian partner Sonatrach. Russia’s energy giant Gazprom has already refused to buy the asset.

Rosneft wants to avoid shelling out more money on the project since its prospects are doubtful and has been looking at sales opportunities for several years already, the sources said. A consortium of Rosneft and Stroytransgaz won a tender for the prospecting work in Algeria, the first foreign project of the company outside the former Soviet Union, in 2001. The company does not officially disclose data on its investments in Algeria.

Rosneft will still have to coordinate its withdrawal from the country with Russia’s authorities, the paper says.

Head of Small Letters Vitaly Kryukov told Kommersant most geological prospecting projects abroad were unprofitable for Russia’s oil companies. In many cases, the projects were launched for political purposes in order to deepen relations between the countries and that’s why the result was predictable.


Vedomosti: Latest US intel allegations on Moscow’s election ‘meddling’ another anti-Trump smear campaign

The latest report of US intelligence officials on Moscow’s alleged interference in the recent US presidential elections is a smear campaign aimed at Donald Trump and his reaction was quite adequate, Victoria Zhuravlyova, a senior research fellow at the Institute of World Economy and International Relations, told Vedomosti.

Trump has repeatedly explained that he does not believe the allegations of Russia’s involvement in the hacker attacks against the US political organizations and insisted that "having a good relationship with Russia is a good thing, not a bad thing." He added that the US has many problems, and Washington and Moscow will possibly work together on solving vital global issues.

"Trump could not have responded to this report in another way, or he would rather have to throw in the towel and say: "Sorry. I’ll hit the road." The report was put out as a feeler before the inauguration because after it his major response to criticism will be through his own actions and the implementation of election pledges, so now he simply cannot do anything else," Zhuravlyova said.

If there aren’t any major shakeups in Americans’ sentiment towards Trump during these weeks-and this depends on whether there will be evidence on the issue in question or not - the story will vanish into thin air, the expert elaborated. Stories seeking to dig up dirt on the US president-elect are no news at all, but usually this covers domestic matters, and in Trump’s case this did not work and that’s why for the first time in many years another country has been conjured up as an enemy, the expert said.

European mass media outlets were skeptical about the creativity of the US intelligence officials, the paper says. "The report is much less detailed than the original one and the analysis gives no particular evidence, and the claims are as old as time," Germany’s Der Spiegel magazine writes.


Izvestia: Strengthening ruble attracts foreign investors

The start of 2017 has been a surprisingly good period for the Russian currency, Izvestia writes. During the New Year holidays the dollar fell below 60 rubles thanks to foreign investors’ resurging interest in the ruble and rising oil prices, as the Russian currency hit a two-year high.

Experts believe that in the coming months the ruble may strengthen to 57 to dollar due to the country’s stabilizing economy and growth in the interest of investors, the paper says.

Chief Economist at the Eurasian Development Bank Yaroslav Lisovolik said "major players on financial market have been placing serious stakes on the ruble." Natalya Orlova, Chief Economist at the Alpha Bank, said the strengthening of the Russian currency signals a positive mood by traders and the ruble’s attractiveness. She does not rule out that this comes amid the prospects US sanctions against Russia being lifted after Donald Trump takes the reigns.

Alla Dvoretskaya, Professor at the Russian Presidential Academy of National Economy and Public Administration under the president (RANEPA), said that foreign investors’ interest in Russian assets continues to grow as the overall situation in Russia’s economy keeps improving.

Meanwhile, the ruble’s increasing strength raises questions before the Finance Ministry and the Central Bank: a strong ruble is unprofitable for the budget as cash injections from exporters could decrease. In general, experts assess that 55-60 rubles per dollar is acceptable for Russia’s economic authorities.


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