Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

LUKoil's $690M Profit

MOSCOW (Reuters) -- Top Russian oil producer LUKoil said Wednesday it made a net profit of $690 million under internationally accepted accounting standards in the first quarter of 2001, beating analysts' expectations.

The company said in a statement that earnings per share under Generally Accepted Accounting Principles were $0.87 for the three months, while earnings before interest, depreciation and amortization were $1.092 billion.

Pretax profits totaled $842 million on net revenues of $3.563 billion. The results were unaudited, and LUKoil gave no comparative figures for the first quarter of last year. It is producing quarterly GAAP results for the first time in 2001. Its net profit for the whole of 2000 totaled $3.3 billion.

LUKoil is to offer 16.6 million ordinary shares through a public offering on Thursday, but analysts said affiliated companies would be able to buy.

The issue will increase LUKoil's capital by about 2 percent and is meant to replace its maturing $230 million convertible bond with a $300 million to $400 million paper later this year.

LUKoil plans to invest $500 million in upgrading its three major oil refineries by 2010, Itar-Tass reported the company as saying.

Moscow Found Guilty

MOSCOW (MT) -- The Anti-Monopoly Ministry has found the Moscow city government in violation of competition laws in the financial service market.

The ministry said Wednesday it had warned the Moscow city government in May to bring its banking practices in line with competition laws. An investigation was opened after Sberbank accused City Hall and the Moscow property department of routing all budget funds through the Bank of Moscow and ordering closed accounts in other banks, including Sberbank.

The ministry found that the city selected commercial banks without holding an open tender. Moscow Mayor Yury Luzhkov defended the city's banking arrangements Tuesday, saying the current system involves almost 10 banks and fully complies with the law. City Hall is considering taking the case to arbitration court.

$79M Sibur Plant Deal

MOSCOW (Reuters) -- Chemical company Sibur, which is controlled by gas giant Gazprom, said Wednesday it had signed a contract with Italy's Technimont for the construction of an 89 million euros ($79.11 million) polyethylene plant.

The plant will be built in the Nizhegorodsk region and have an initial capacity of 120,000 tons a year. Capacity later could be raised to 240,000 tons.

Another participant in the deal is BASEL -- a joint venture between Germany's BASF and Royal Dutch/Shell.

The cost of all contracts is projected at about 150 million euros.

"This will be the first plant in Russia capable of producing polyethylene that can be used in the production of gas pipes," Sibur president Yakov Goldovsky told journalists.

$370M August Deficit

MOSCOW (MT) -- The federal budget deficit for August totaled 11 billion rubles ($370 million), Prime-Tass reported a Finance Ministry official as saying Wednesday.

Federal budget revenues amounted to 133.2 billion rubles last month, while spending was at 144.2 billion rubles.

Severstal Bank Buy

MOSCOW (MT) -- Steel giant Severstal has acquired a 10 percent stake in St. Petersburg-based bank Promstroibank, Prime-Tass reported the company as saying Wednesday.

The stock buy, on the secondary market, is a part of an integration program carried out by Promstroibank and Cherepovets-based bank Metkombank, in which Severstal holds 80 percent.

Nickel Exports Rise

MOSCOW (MT) -- Exports of primary nickel to non-CIS states in the first seven months soared 11 percent year-on-year to 96,600 tons, Interfax reported Wednesday.

The country exported $613.1 million worth of primary nickel, the State Customs Committee said, quoting preliminary figures. Primary aluminum exports to countries outside the CIS rose 5 percent to 1.8 million tons for $2.17 billion.

IMF Cuts Forecasts

WASHINGTON (Reuters) -- With downside risks to the global economy mounting and European growth prospects bleaker than previously thought, IMF economists have cut their global growth forecast for the year to 2.7 percent from April's estimate of 3.2 percent, an IMF source said Tuesday.

That forecast, being prepared for publication in the International Monetary Fund's World Economic Outlook later this month, has been shaved back from a 2.8 percent growth rate staff economists had expected just last month. The report sees 2002 growth of 3.6 percent, down from the 3.9 percent the lender forecast in April.

The IMF's forecast for Russia, enjoying a boom of oil revenues as energy prices remain high, remains unchanged at 4 percent for both next year and this year -- a third lower than the 6 percent the government is now expecting.

Russia, China Pipeline

MOSCOW (Reuters) -- Russia and China will sign an agreement within days to set out how they will cooperate on building an oil pipeline linking the two countries, Itar-Tass quoted officials as saying Wednesday.

The decision came after talks Tuesday between Energy Minister Igor Yusufov and China's National Oil Co., the the Energy Ministry was quoted as saying.

The Russian government is considering a feasibility study for the pipeline, which would run from western Siberia to China. Transneft and Yukos are working together on the idea of building the $2 billion pipeline.

Crude Exports Up

MOSCOW (Reuters) -- Crude oil exports outside the Commonwealth of Independent States were 78.56 million tons (2.72 million barrels per day) from January to July 2001, State Customs Committee data showed Wednesday.

Exports of crude to hard currency markets rose 6 percent compared with the first seven months of 2000.

Vimpelcom Hits Tver

MOSCOW (MT) -- Vimpelcom on Tuesday began commercial operations in Tver, planning to grab at least half of the mobile market in this city north of Moscow by the end of 2003.

The first GSM network launched under Vimpelcom's regional arm, Vimpelcom-R, the Tver-based operator will compete against an already-established Mobile TeleSystems, which has around 15,000 subscribers. United Financial Group estimated the market potential for Tverat around 100,000 subscribers.

By the end of the year, Vimpelcom is to launch operations in 11 more cities in the Central, Siberian, Southern and Volga federal districts.