MOSCOW PRESS REVIEW FOR NOVEMBER 2, 2005 (UPDATE)

02 November , 2005
Author unknown

MOSCOW. Nov 2 (Interfax) - The following is a digest of Moscow
newspapers published on November 2. Interfax does not accept liability
for information in these stories.

POLITICS & ECONOMICS

The strong ruble has already made many Russian industries
uncompetitive, inflation will top 12% in 2005, and value-added tax
should not be cut from 18% to 13%, as this tax is the main source of
revenue not dependent on oil prices, the World Bank said in a report on
the country's economy presented in Moscow Tuesday (Kommersant, p. 1;
Vremya Novostei, p. 2).

President Vladimir Putin began a two-day visit Tuesday to the
Netherlands, during which Dutch leaders and industrialists are expected
to explore ways of increasing business with the booming Russian energy
industry (Moscow Times, p. 1; Vremya Novostei, p. 1,2).

Almost two-thirds of Russians do not believe it is possible to
conduct an honest and at the same time profitable business in the
country, a new survey shows. Businessmen blame the authorities, while
analysts are more upbeat about the figures (Vedomosti, p. A1).

Former Prime Minister Mikhail Kasyanov began a two-day visit to
Samara on Tuesday, his first trip to the Russian provinces since he
announced plans to run for president in 2008 as an opposition candidate
(Kommersant, p. 1).

Interview: Kakha Bendukidze, Georgia's Minister for Economic and
Structural Reform (Vremya Novostei, p. 2).

Profile: Deputy Prosecutor General Vladimir Kolesnikov (Moscow
Times, p. 1).

OIL & GAS

President Vladimir Putin curtly rebuked oil companies on Tuesday
for trying to increase the overall spending plan for the Sakhalin-2
offshore oil and gas project from $12 billion to $20 billion. In another
indication Russia has turned down Shell, the Industry and Energy
Ministry said it thought changes to the project budget were unjustified
(Kommersant, p. 1).

The appraisal of Rosneft subsidiaries for their future
consolidation shocked investors, as Deloitte's assessment of some was
far below their market value, causing their share prices to tumble.
However, Deloitte appraises the state oil company's stakes in new fields
at more than $19 billion (Vedomosti, p. B1).

Interview: Leonid Mikhelson, general director and principal
shareholder of independent Russian gas company Novatek (Vedomosti, p.
A5).

METALS & MINING

Russian metals giant Norilsk Nickel, which is controlled by
Vladimir Potanin and Mikhail Prokhorov, is in talks to exchange a
blocking stake in utility Kolenergo for shares in Finland's Fortum, one
of Europe's biggest power companies (Vedomosti, p. A1).

In a rare case for Russia, the former president of Norilsk Nickel
subsidiary Norimet, Pyotr Kholodny, is suing his former employer for
compensation in a London court, claiming he was wrongfully dismissed
(Vedomosti, p. B1).

BANKING, FINANCE & INSURANCE

The principal shareholder of the National Reserve Corporation,
State Duma deputy Alexander Lebedev, is taking the government to court,
alleging that the problems leading to the freezing of shares in aircraft
leasing company Ilyushin Finance were created by the government itself
(Vedomosti, p. B1).

TELECOMMUNICATIONS, MEDIA & TECHNOLOGY

No. 2 mobile operator VimpelCom might be able to buy Ukrainian
Radiosystems (URS) and make peace with Norway's Telenor - with the help
of Ericsson. The telecom equipment maker would transfer $83 million to
URS, which would reduce the net cost of the purchase by 40%, in exchange
for a major contract with VimpelCom (Vedomosti, p. A1).

A Hong Kong company, Asiatotal.net is hoping to help close Russia's
digital divide by distributing free personal computers to those who
cannot afford them - and make a profit in the process (Moscow Times, p.
7).

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