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THEY ARE ALL IN RUSSIA!!!!!
Mon, 15 Sep 2003 

George Bush Sr In Russia
On Carlyle Business
Bush Sr, Kissinger, Giuliani, Brzezinski, d'Estaing In Leningrad
The Moscow Times
9-15-3


He may be retired from public life but George Bush seems to cause a stir
every time he comes to Russia.   You name it and market players were buzzing
Thursday about the real reasons behind the former American leader's visit -- an $18
billion play by U.S. oil giant ChevronTexaco for a blocking stake in the new
Yukos-Sibneft combo? The launch of a $500 million private tie-up between Alfa
Group and Pentagon-connected Carlyle Group? Divvying up the hydrocarbon
resources of postwar Iraq?   Late Wednesday, before Bush Sr. had even left, traders
in New York had already heard word that he was heading to Russia to help clear
the way for the sale of a strategic stake in YukosSibneft to ChevronTexaco,
which named one of its tankers after Condoleezza Rice, a former board member
who is now his son's national security adviser.   But it didn't stop there. The
buzz continued Thursday as news spread that Bush was also here to help
finalize the creation of a $500 million private equity fund between Russian
oil-to-telecoms giant Alfa and one of his present employers, the Carlyle Group, a
defense industry insider that counts former U.S. Secretary of State James Baker and
former British Prime Minister John Major among its advisers.   The U.S.
Embassy in Moscow would not comment on Bush's visit, saying only that it was
"private." What is known, however, is that he will meet with President Vladimir
Putin in the Kremlin on Sunday, when he arrives in Moscow from St. Petersburg. The
Kremlin, too, declined to say what was on the agenda.   It is also known that
Bush will deliver the keynote speech at a dinner Monday evening for Russian
business leaders -- including Yukos founder Mikhail Khodorkovsky -- on behalf
of Carlyle.   "We use him to speak at conferences and events," said Carlyle's
London-based spokeswoman Katherine Elmore-Jones. Jones, however, would not say
if a new private equity fund would be officially announced, but did say that
the deal, which the Financial Times first reported is in the works, was still
being discussed.   But with U.S.-Russia energy ties high on the agenda for both
nations and a bilateral summit on the issue scheduled to begin in St.
Petersburg in 10 days, all eyes were on Chevron and its possible purchase of a 25
percent plus one share stake in the new YukosSibneft. The Sunday Times last month
quoted anonymous sources close to the deal as saying it was near completion.
  Yukos shares jumped more than 4 percent on the news in early trading
Thursday.   "This rumor is based on Bush's visit. He is probably going to discuss the
acquisition of a stake in YukosSibneft by a major U.S. oil company," a
prominent investment banker said.   He said the rumor is that Yukos' sale of a
strategic stake to Chevron would be announced at the St. Petersburg summit.   But
neither Yukos nor ChevronTexaco would comment on what both companies called
"market speculation."   However, other investment bankers were very specific,
saying the price for the deal had already been agreed -- a staggering $18.6
billion for 25 percent plus one share, half in cash and half in ChevronTexaco
stock, which would be a huge premium over the combined market value of the
companies.   But with Yukos under fire from the Kremlin for its moves to finance
opposition parties amid a massive bout of infighting between clans in the Kremlin
itself, analysts said it seemed that most of the buzz was coming from Yukos.  
"Yukos is pushing this, given that there is the possibility of a renewed
attack against the company during the election campaign," said Christopher Weafer,
chief strategist at Alfa Bank. "Yukos is trying to bend a deal to suit its own
purposes, for protection.   "The attack on Yukos in July turned out to be
hugely popular with the electorate and they fear the Kremlin might launch
something again," Weafer said. Core Yukos shareholder Platon Lebedev was arrested
that month for allegedly stealing property in a 1994 privatization.   Weafer said
Yukos shareholders appeared to be trying to play two U.S. oil majors, Chevron
and ExxonMobil, off of each other in a bid to push the deal along.   "There
is room for one more deal in the pipeline. Getting a third [sale of a Russian
oil company to a foreign company] approved will be much more difficult," he
said. Rival global oil giant BP's recent $6.35 billion deal for a 50-50
partnership with Alfa and Access/Renova's Tyumen Oil Co. boosted BP's global ranking
and set off a race between other global oil majors to be the next to clinch the
next big deal in one of the fastest-growing oil patches in the world.  
Executives from both Chevron and Exxon have been in Moscow for months conducting due
diligence studies on Yukos and Sibneft. One market insider said "they are
only here because the other one is here."   Joseph Stanislaw, the president of
the influential Washington-based think tank Cambridge Energy Research
Associates, said by telephone that a race certainly seemed to have started for Russia's
oil resources, especially because Iraq, which has the world's second-largest
reserves, is still in chaos.   "For international oil majors to grow they have
to find brand new reserves. The only opportunities are in Russia, Kazakhstan
and parts of the Middle East," said Stanislaw, who is also visiting Moscow.
"Iraq is a potential opportunity, but nobody is sure when they are going to be
able to go in. If you're not the first and second mover in Russia, you could
lose an opportunity. In Iraq, there isn't even a queue yet."   But despite the
Bush family's well-known ties with the oil industry, some analysts said they
doubted he would try and talk up a deal with YukosSibneft.   "He's on a retainer
for Carlyle. He's not cheap and he's not silly. He's here to launch a major
investment fund," said James Fenkner, head of research at Troika Dialog.  
Analysts also questioned whether it would make any sense for a big oil major to
risk billions at a time when Russia seems to be moving into a period of
increasing political uncertainty.   "Why a buyer would take a minority stake in
YukosSibneft before the elections and when the company is under pressure from the
Kremlin is beyond me," Fenkner said. "It would be a pretty darn aggressive play."
  Other sources with knowledge of Bush's visit, however, said privately that
Bush would use the visit precisely to help clarify the uncertainty swirling
around Yukos.   Yukos chief Khodorkovsky has become a leading Russian voice in
the West in recent years. He was the first Russian oil baron to send crude
directly to the United States -- Texas to be exact -- and was key in establishing
high-level energy talks between both countries. He has also tied himself to
the Rothschilds, one of the West's most influential banking families, and set up
a fund -- the Open Russia Foundation -- to promote ties between former Cold
War foes. Influential U.S. foreign policy guru Henry Kissinger sits on Open
Russia's board, as does Lord Jacob Rothschild.   Kissinger, coincidentally, is
also currently in Moscow, and will attend the Carlyle dinner.   Bush last came
to Moscow in June of 1998 -- just two months before the economy imploded -- for
the lavish opening of international investment banking giant Goldman Sachs'
office here.     http://newsfromrussia.com/main/2003/09/12/49940.html