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. Last Updated: 07/27/2016

Business in Brief

Oil Tariff Increase?


The Finance Ministry has said it plans to hike crude export tariffs if world oil prices rose beyond the $20 per barrel mark and a law reducing the overall tax burden on oil companies was passed this year.

"The reduction of the overall tax burden on oil companies will allow us to consider hiking export tariffs," Deputy Finance Minister Sergei Shatalov told reporters on Friday.

"If crude prices are under $20 per barrel, the old rate will apply — that is $9 per ton. But at higher prices, new, higher rates will be used," he said, speaking after a Cabinet meeting.

Shatalov, in charge of tax reform, had earlier unveiled plans for a single duty on oil producers that would effectively reduce their tax burden by $1 billion a year and reroute the revenues into federal coffers away from the regions.

"If oil prices are $20 to $22 per barrel, tariffs will be 17 euros ($15.10) per ton instead of 14 euros at present, while if prices are between $22.5 and $25 per barrel, a 26 euro tariff rate will apply in place of 20 euros now," Shatalov said.

The new law on taxation of oil, metals and gas will be put before parliament in two weeks.

GKO Auction


The Finance Ministry has published details of an auction for 3 billion rubles ($104 million) worth of six-month GKO treasury bills to be held Wednesday.

Deputy Finance Minister Bella Zlatkis announced the auction last Monday. She also said that 6 billion rubles of GKOs maturing this year would be auctioned in May and June.

The ministry said the auction Wednesday would be open to both domestic and foreign investors.

Algeria Pipe Deal


ALGIERS, Algeria — Algeria on Saturday signed two contracts worth $161 million with a U.S.-Algerian consortium and Russian company Stroitransgaz to build an 822-kilometer oil pipeline, the official APS news agency reported.

The duct will link the Haoudh el Hamra oil fields in the Sahara to the major refining terminal port of Arzew on the Mediterranean.

A first contract worth 6.6 billion dinars ($83 million) was signed between state oil and gas company Sonatrach and a U.S.-Algerian consortium composed of state-run engineering and construction company Cosider and Sonatrach with an Algerian affiliate of U.S. contractor Kellog Brown and Root. The consortium will build the 419-kilometer first tranche of the project.

The second deal worth 6.2 billion dinars was signed with Stroitransgaz for the construction over the next two years of the second half of the pipeline, 403 kilometers to Arzew, near the western city of Oran.

He said another contract, worth $32 million, to build oil pumping facilities along the pipeline would be signed in the next few days with a consortium comprising French Spie Capag engineering firm and Saipem, a subsidiary of Italy's ENI energy giant.

Guinea Investment


Industrial giant Russian Aluminum has said it will invest $40 million into upgrading a Guinea bauxite mine and is seeking to purchase a stake in another project in the African country.

Andrei Raikov, Russian Aluminum's Guinea operations chief, told a news conference on Friday his company had won the right to manage the Societe des Bauxite de Kindia, or SBK, mine in Guinea for a 25-year period.

The company plans to boost the mine's output to 2.5 million tons a year from 1.5 million tons in 2000. The investments are to be made over the next three years.

"We have given the Guinea government concrete forecasts of work and payments for the next 12 years but the initial six years will be used for exploration," Raikov said, adding that reserves could be up to 60 million tons.

Russian Aluminum has also proposed buying a stake in the Companies des Bauxites de Guinea, or CBG, the world's largest bauxite mine producing 14 million tons of bauxite annually. It is also seeking permission to develop Guinea's Dian-Dian bauxite mine near the Mali border. Dian-Dian's total bauxite reserves are estimated at 400 million to 700 million tons.

"Long-term investments in this project could be up to $1 billion," Raikov said.

GDP Rises 4%

The Moscow Times

Russia's gross domestic product has risen by more than 4 percent since the start of 2001 and the country will meet its economic targets for this year, Prime Minister Mikhail Kasyanov was quoted by news agencies as saying Saturday.

Russian news agencies quoted him as saying industrial production was up 3 percent while real income grew by 5 percent.

Inflation was expected to be down this year and to drop to 8 percent or 10 percent in two years, he said.

Kasyanov added, however, that the economy was "not yet stable."

President Vladimir Putin had warned on April 3 of a risk that the Russian economy would slow down, stressing the need to speed up reforms.

Hard Candy Tariff

The Moscow Times

Russia last week introduced a special import duty of 21 percent of customs value on hard candy and other confectionery products, Interfax reported Friday.

Prime Minister Mikhail Kasyanov on Wednesday signed the corresponding governmental resolution, which aims to protect domestic candy producers. Imports from Belarus will not be subject to the tariff.

Confectionery market experts say the new duty most of all targets Ukrainian hard candy products.