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. Last Updated: 07/27/2016

Business in Brief

TNK, BP Crude Deal

MOSCOW (Reuters) -- No. 3 oil producer Tyumen Oil Co., or TNK, said Thursday it had signed a deal with global oil giant BP to sell 1.65 million tons (12 million barrels) of crude over the next 10 years.

BP and Tyumen said in a joint statement that the deal was part of multi-million credit agreement between Tyumen and the U.S. Export-Import Bank.

BP Oil International, a subsidiary of the international major, will take TNK's oil from the Black Sea port of Novorossiisk on free-on-board conditions as well as from the Druzhba pipeline, running from Russia to Central Europe.

"This long-term contact will strengthen our position on the Russian crude oil market and will help us to meet the demand of our refineries," BP said in a statement.

Ex-Im Bank has provided guarantees for a $231.5 million credit that TNK will use to upgrade its Ryazan refinery, which processes 240,000 barrels per day.

Yukos' Kvaerner Plans

MOSCOW (Reuters) -- No. 2 oil major Yukos said Thursday it wanted struggling British-Norwegian engineering group Kvaerner to undertake deep restructuring and sell its non-core assets.

Yukos this week increased its stake in Kvaerner to 22 percent from 12.1 percent and agreed to pay $100 million for two London-based units of Kvaerner, which would provide services on Yukos oilfields in Western Siberia.

"We think our investment in Kvaerner has prospects but the company has to begin deep restructuring including the possible sale of non-core and unprofitable assets," said Hugo Ericsson, head of Yukos' international department.

Kvaerner's board approved on Wednesday the sale of its Hydrocarbons and Process Technology units, employing some 1,000 people in Britain, Switzerland, France and Italy, to Yukos. It will provide it with up to $50 million in services on Western Siberia oilfields.

Kvaerner is currently seeking debt refinancing and plans to issue up to 2 billion Norwegian kroner ($224 million) in new shares to secure fresh funds.

Sibneft Downgrade

MOSCOW (Reuters) -- Brunswick UBS Warbung said it had downgraded oil company Sibneft to "hold" from "strong buy" following the company's reselling of a minority stake to core shareholders.

The broker also reduced the price target to $0.75 from $1, after Sibneft announced Monday it had sold 27 percent of its shares to key owners ahead of a large dividend payment.

"The transaction is a clear blow to Sibneft's corporate governance reputation," Brunswick said in a research note issued late Wednesday. "While management vigorously reiterated plans to bring the company public, we see this transaction as a serious setback."

The broker also said the stock would continue trading at a large discount to others with better corporate governance records.

Transneft: Profit to Rise

MOSCOW (Vedomosti) -- Oil pipeline monopoly Transneft expects profits to rise 20 percent year-on-year to 13 billion, Transneft president Semyon Vainshtok said in an interview published Thursday.

He did not specify which type of profit the figures represent.

He said the higher year-on-year profit would be largely due to the company's policy of spending cuts, as oil transportation tariffs remained unchanged.

Vainshtok also said about 27 million tons of oil remained in Transneft's pipelines from the Soviet era. "This oil belongs to Transneft," he said, reacting to some oil companies' demands that the oil should be divided among oil producers.

Vainshtock also said the company recently sold 200,000 tons of the oil and allocated the resulting $20 million to the construction of the Baltic Pipeline System, which involves the construction of a pipeline to the Baltic port of Primorsk.

Ruble Slips to 29.59

MOSCOW (Reuters) -- The ruble slipped further against the dollar Thursday amid weak demand and the Central Bank did not step in to prop it up, dealers said.

The ruble's weighted average in a unified session of eight exchanges fell to 29.5861 per dollar Thursday from 29.5686 per dollar Wednesday. Trades worth $54.52 million were registered.

The balances of Russian banks on their correspondent accounts at the Central Bank, a key indicator of banks' liquidity, climbed to 74.4 billion rubles on Wednesday from 71.90 billion rubles the previous day.

OPEC Minister to Visit

DUBAI, United Arab Emirates (Reuters) -- Saudi Oil Minister Ali al-Naimi is expected to visit key non-OPEC producers Russia and Mexico prior to OPEC's Nov. 14 meeting to coordinate a strategy for shoring up oil prices, a Gulf industry source said Thursday.

"OPEC is not going to work single-handedly" to boost oil markets, said the industry source.

Some ministers from the Organization of Petroleum Exporting Countries have called for a supply reduction of up to 1 million barrels per day. They also want non-members' help in curbing supplies.

OPEC has been stepping up contact with non-member countries, with some cartel delegates expecting independent producers at the very least to freeze production to lift oil prices.

Debit Calling Card

MOSCOW (MT) -- Moscow-based Guta Bank and long-distance monopoly Rostelecom on Thursday unveiled the country's first calling card using a debit system.

The Visa Electron card can be used with a password to make domestic and international long-distance calls through Rostelecom or to call Russia from abroad.

The bank has spent "several hundred thousand dollars" on developing the project, said Guta Bank vice president Sergei Abramov.

The bank plans to issue a minimum of 15,000 cards next year.

With a sign-up fee of $5 per card, about 10 percent of which goes to the bank, the offering is geared more toward attracting a mass of clients than a quick payback. "We're putting the accent on clients getting used to us," said Abramov. "We don't expect to get a return on this in one year."

Airport Boss Exits

MOSCOW (MT) -- Sheremetyevo Airport's board of directors on Thursday approved the resignation of general director Sergei Sutulov, Interfax reported.

Sutulov said at a working meeting Monday that he is leaving the post, citing health reasons. First deputy director Yevgeny Bakhteyev is filling in as general director.

Raboinvest Bond Issue

MOSCOW (MT) -- Raboinvest, a subsidiary of the Dutch Rabobank group, expects on Friday to place the last of four tranches of a 600 million ruble bond issue on the Moscow Interbank Currency Exchange.

The company placed the three previous tranches with a total nominal value of 450 million rubles earlier this week.

The issue is underwritten by Russian Funds and International Moscow Bank and is guaranteed by Rabobank, which has an AAA credit rating. The guarantees allow Raboinvest to ask for a relatively low yield of 14.5 percent, a 0.5 percent spread over state securities.

For the Record

Gazprom pocket bank Gazprombank said profits in the first half of 2001 totaled $61 million under international accounting standards -- beating total profits for the full 2000 by 140 percent, Prime-Tass reported Thursday. (MT)

Foreign currency and gold reserves stood at $38.6 billion Oct. 19, unchanged from a week earlier, the Central Bank said Thursday. (Reuters)

Consumer price inflation will quicken to 1.1 percent to 1.3 percent in October from 0.6 percent in September if current price trends continue, the State Statistics Committee said Thursday. It also said in a statement prices had risen 0.8 percent between Oct. 1 and 22. (Reuters)

South Korean carmaker Hyundai Motors sold 1,076 cars through its official dealerships in Russia in January to September -- up from 373 cars over the same period last year, Prime-Tass reported Hyundai's Russia office as saying Thursday. Hyundai's sales in Russia totaled 554 cars in 2000. (MT)

Trade turnover between Moscow and the United States totaled $791.2 million in the first half of 2001, Interfax reported City Hall as saying Wednesday. (MT)