Top stories in the Russian press on Tuesday, August 27, prepared by TASS

Izvestia: Kiev, Moscow set to exchange prisoners before end of week

Russia and Ukraine will continue laying the groundwork towards an imminent prisoner swap on August 27, the attorney for several Russians being held in Ukrainian prisons Valentin Rybin told Izvestia. The lawyer said that the return of those in custody was planned to be held before the end of this week. In addition, their charges are expected to be dropped, he noted. Sources close to the process confirmed to Izvestia that the lists are being finalized. However, journalist Kirill Vyshinsky is not among them, and the situation regarding the Ukrainian sailors is still not clear. According to experts, in any case the prisoner swap will positively affect the atmosphere of trust between Russia and Ukraine, which will ultimately impact the Donbass settlement.

The current silence on the exchange list is not associated with any difficulties in the negotiation process, but with the "sensitivity of the topic", sources told Izvestia. According to them, the deal is in its final stage, but, it is too early to announce a final date so as not to "interfere with the resolution of the issue." "I expect the exchange to take place this week. I can’t say the exact date yet. It’s a holiday, a long weekend in Ukraine that started on August 24. Intensive efforts will resume on Tuesday. One way or another, everything should happen soon," Attorney Valentin Rybin told the newspaper.

Meanwhile, there is still no final decision on how many people will be swapped. A source told Izvestia, "the 33 for 33 formula that surfaced in the media is tentative, since things are still up in the air regarding some people."

Chairman of the State Duma's Committee on CIS Affairs, Eurasian Integration and Relations with Compatriots Leonid Kalashnikov, said that Moscow and Kiev would "get solid advantages" from bringing the Ukrainians and Russians back home. "Any step towards the exchange of prisoners will be seen as positive. Any at all - regardless of how many people will be exchanged or how soon this happens," he told Izvestia.

Kommersant: China negotiating supply of helicopters with Russian-made engines

Russian Helicopters is set to begin deliveries of 10 medium twin-turbine transport Mil Mi-171 helicopters equipped with VK-2500 Russian engines to China at the beginning of 2020, Kommersant wrote. The deal may be financed by the State Transport Leasing Company (GTLK), which the sides view as the potential leasing agent. GTLK, in all likelihood, will also work to help bankroll the delivery of the latest Mi-171A2 for 800-900 mln rubles ($12.1-13.62 mln) to India's Vectra.

According to General Director of GTLK Europe Roman Lyadov, the company is in talks with China's Qindao Helicopters. The Chinese company is looking for financing options for the deal, that include GTLK and possibly foreign banks. Russian Helicopters is staying mum on the progress of the negotiations. Sources told Kommersant that the first deliveries are scheduled for January-February 2020.

Sources in the aviation industry told the newspaper that the talks include the supplies of aerial vehicles equipped with VK-2500 engines. Previously, the helicopter was equipped with a Ukrainian-manufactured motor. The newspaper’s source noted that the Russian engine costs 16 mln rubles ($242,133) more, though it does not differ technically.

Executive Director of the Aviaport Agency Oleg Panteleev told Kommersant that the civilian Mi-171 sees less demand and volume of deliveries than the Mi-8 helicopter. Its global competitors include the H225 Super Puma manufactured by Airbus, the NH 90 manufactured by NH Industries, and the US-made Sikorsky S-92.

Nezavisimaya Gazeta: Moscow pushing Erdogan towards Su-35 purchase, talks with Syria

Turkish President Recep Tayyip Erdogan’s spontaneous visit to Moscow on August 27 coincided with the start of the deliveries of the second division of Russia’s S-400s to Turkey. Contrary to all expectations that observers made after the implementation of the S-400 deal, relations between the two countries did not receive a new impetus, Nezavisimaya Gazeta wrote. Turkish experts believe that Ankara has become very dependent on Moscow, and now, after the air strike on the Turkish convoy in Syria, Erdogan will have to make new concessions to Moscow.

Russian President Vladimir Putin will meet with Erdogan. They will face tough negotiations on regional issues, the newspaper wrote. The conversation is expected to take place after the MAKS-2019 air show. According to experts, Erdogan’s upcoming visit to Moscow is unplanned and mostly unexpected, since the presidents were supposed to meet in Ankara in mid-September. Due to the haste, there is reason to believe that Erdogan’s arrival in Moscow is compulsory, the newspaper wrote. The recent air strike against a heavily armed Turkish convoy moving towards the Syrian city of Khan Shaykhun could be the reason, the newspaper reported.

Turkish political scientist Kerim Has told the newspaper that Turkey needs dialogue with Damascus, namely with Syrian President Bashar al-Assad, but Erdogan has no direct contact with him. The expert believes that the meeting will not be easy. Turkey could not have thought that after the start of S-400 deliveries, Moscow would continue to support Damascus. Moscow’s policy largely ties Erdogan’s hands and Ankara is becoming increasingly dependent, he added.

The expert noted that Erdogan would have to make concessions again and most likely revive the conversation about purchasing Russia’s Su-35 fighter.

Kommersant: Russia could allow private companies to use shelf for oil

For the first time since 2015, the Russian government has resumed discussion on whether to allow private companies to independently work on the shelf. The question was raised at the initiative of Deputy Prime Minister Yuri Trutnev, who expects to speed up the development of the Arctic. However, sources in the industry and analysts told Kommersant that they have doubts over any sort of positive outcome from the dialogue. According to them, given the sanctions and low oil prices, private companies are hardly interested in the shelf after Rosneft and Gazprom have already pocketed the most promising licenses for themselves.

The mitigation of offshore access, currently being talked about, will not affect the already issued licenses, the newspaper wrote. Private companies will be able to claim unallocated areas at best, which, according to a Kommersant source, make up only 10% of the total number of offshore licenses. Such areas do not contain reserves on the balance sheet, and companies would have to conduct research on the possible presence of hydrocarbons. Kommersant’s sources in the industry noted that the most promising areas have already been taken and that is why private players are now not actively interested in the Arctic shelf. However, a source close to Yury Trutnev’s office told the newspaper if access to the shelf is liberalized, interest in Arctic exploration could increase.

Offshore projects are extremely expensive and look unprofitable given the current oil price climate and tax system, Victoria Turgeneva from KPMG told Kommersant. The only Russian private company that has offshore experience and access to financial resources is Lukoil, says Fitch’s Dmitry Marinchenko. However, Lukoil is unlikely to be interested in unattractive licenses, "especially in light of the company's conservative approach to business management," he told the newspaper.

Izvestia: US-China tensions, Washington's new sanctions fail to impact Russia

The mounting trade war between the United States and China, as well as the entry into force of the second package of Skripal-related sanctions, did not have any significant impact on the Russian economy. The Russian stock exchanges at the opening of trading on August 26 dipped slightly. Experts interviewed by Izvestia called the new US restrictions against Russia superficial, but added that there would be no winners in the trade war between Washington and Beijing, and its consequences would lead to a recession in these countries.

The decline in Asian stock markets after US President Donald Trump announced a hike in duties on goods from China from September 1, contrary to expectations, had no noticeable effect on either the Russian or European stock markets, BCS Premier Senior Analyst Sergey Suverov told Izvestia. Thus, the Moscow Exchange closed with a decline of only 0.09% reaching 2658.24 points, while the RTS index inched down by 0.02% to 1268.25 points, and the Russian currency also only slightly decreased against the dollar and the euro.

Washington’s second sanctions package against Russia tied to the Skripal case also entered into force on Monday. The restrictions will affect the exports of dual-use products, which can be used to create chemical and biological weapons. In addition, the restrictions will impede the provision and extension of loans to Russia by the World Bank and the IMF. The second package of US sanctions present no new challenges that could put serious pressure on the ruble and may be seen as a formality, Finam Group Analyst Sergey Drozdov told Izvestia. “If the White House would have imposed sanctions against public debt in rubles, this could have indeed been unpleasant news. However, the US Treasury has already spoke out against such actions last year," he said.

Meanwhile, Sergey Suverov from BCS Premier told Izvestia, he is confident that there will be no major reduction in demand for Russia's public debt.