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. Last Updated: 07/27/2016

Business in Brief

$1.7Bln for Blue Stream


European and Japanese banks have opened a $1.76 billion credit line for the $3.3 billion Blue Stream pipeline project to carry gas from Russia to Turkey, Gazprom said Tuesday.

"On May 25, banks organizing credit lines for the Blue Stream project confirmed the fulfillment of all the preliminary terms for extending loans and opening full-scale financing of the project," Gazprom said in a statement.

It said the first tranche would amount to $300 million.

The pipeline is scheduled to start pumping gas from Gazprom's deposits in western Siberia to Sumsun on Turkey's Black Sea coast and then to Ankara in the first quarter of next year. Its annual capacity is 16 billion cubic meters.

Gazprom backs the ground part of the pipeline with its gas export revenues. A joint venture between Gazprom and Italy's Eni/Snam backs the underwater part of the pipe.

A group of European banks led by IntesaBci, Mediocredito Centrale and Westdeutsche Landesbank Girozentrale will provide $1.13 billion to build the underwater portion of the pipeline.

The loan is guaranteed by a group of European insurance firms led by Italy's SACE.

Ruble Hits 29.1


The ruble hit a record low Tuesday, under pressure from unusually high liquidity, and the Central Bank intervened to prevent an even greater fall, dealers said.

The ruble's weighted average for today settlement fell to 29.1035 per dollar in the key unified session of eight exchanges after 29.0673 per dollar on Monday.

The Central Bank cut its official next-day rate to 29.10 rubles per dollar after a previous 29.07, based as usual on the results of the unified session.

"Only the Central Bank's [dollar] offer stabilized the market," a dealer said.

Dealers said the Central Bank sold about $100 million on the interbank market in the morning at 29.1100 to 29.1150, but suspended intervention when the ruble stopped falling.

UES Profits Up 38%

The Moscow Times

First-quarter net profits for national power grid Unified Energy Systems rose 37.7 percent over 2000 to 14.64 billion rubles ($503 million) under Russian accounting standards, the company said Tuesday.

The company said net sales rose 36.4 percent to 122.7 billion rubles for the same period under RAS, which differ significantly from international standards.

The company's operating profit rose 51.5 percent to 25.54 billion rubles.

Tax Reform Deadline

The Moscow Times

The government will finish overhauling the tax system next year with the passage of laws on property taxes, payment of the use of natural resources and a single agricultural tax, Interfax quoted the Finance Ministry's chief of tax policy as saying Tuesday.

Four chapters of the Tax Code, on value-added tax, excises, a single social tax and personal income tax, have been passed since the beginning of the year, and the State Duma is now debating the chapter on the profit tax, Alexander Ivaneyev told a tax conference.

Ivaneyev said a bill on the sales tax would be submitted "soon" and the sales tax would be scrapped altogether in 2004.

Tatneft Earns $3.7Bln

The Moscow Times

In 2000, oil major Tatneft earned revenues of 105.9 billion rubles ($3.76 billion), an increase of about 140 percent from 1999, according to a summary of the annual report published on the company's web site.

Costs under Russian accounting standards in 2000 totaled 62.8 billion rubles, and net income came in at 23.2 billion rubles, six times the amount earned in 1999.

Tatneft will pay out a 2000 dividend of 30 kopeks per common share and 60 kopeks per preferred share, Prime-Tass reported. The government of Tartarstan owns 31 percent of Tatneft.

Russian accounting standards are of limited value to investors because they underestimate some expenses tied to depreciation of capital.

TNK Revenues $1.9Bln

The Moscow Times

Tyumen Oil Co.'s revenues in 2000 totaled 54.1 billion rubles ($1.9 billion), which is 1.4 times the level of 1999 sales, according to the company's annual report compiled to Russian accounting standards.

Net income in 2000 was 7.7 billion rubles, of which 4.8 billion was spent on capital investments and 74 million on social programs. Tyumen Oil Co., or TNK, produced 197 million barrels of crude oil, a 34.5 percent increase from 1999. This number includes production from the Samotlor field, home to disputed production unit Chernogorneft.

Last year, TNK exported 86 million barrels of crude oil and 35.6 million barrels of oil products.