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. Last Updated: 07/27/2016

Business in Brief

PSA Coordinators

MOSCOW (Reuters) ? The government said Friday it had appointed state-owned Rosneft and Zarubezhneft oil companies to represent its interests in production-sharing agreements in the oil and gas sectors.

The resolution, signed by Prime Minister Mikhail Kasyanov, said the two companies and the government would now sign special agreements on their functions in each particular PSA.

The resolution added that Rosneft and Zarubezhneft would not represent state interests in any PSA where these companies are involved themselves.

These two remaining state oil companies will now be responsible for selling on the markets the volumes of crude that PSA operators are obliged to transfer to the state.

PSA projects produced a tiny 2.2 million tons (16 million barrels per day) of crude in 2000, or 0.7 percent of Russia's total output.

Rosneft produced 13.5 million tons of crude in 2000. Zarubezhneft, whose main producing units are in Vietnam, extracted 13 million tons of crude.

Bosnia Refuses $100M

SARAJEVO, Bosnia-Herzegovina (AP) ? Bosnia has refused a Russian offer of a nonmonetary loan worth $100 million, the Sarajevo daily Oslobodjenje reported Sunday, citing Russia's ambassador to Bosnia.

Speaking during a panel discussion Saturday in Sarajevo, Alexander Griscenko said his government offered Bosnian authorities the loan of goods some three months ago.

"We offered $100 million, but they didn't want to take it," Griscenko said without giving details of what the goods were or why Bosnia declined the loan.

The loan had been meant to be shared equally by Bosnia's two entities: the Moslem-Croat federation and the Serb republic.

A group of Russian business representatives interested in lumber and hide-tanning industries is set to come to Bosnia soon, Griscenko told the paper.

Turkmenistan Slammed

BAKU, Azerbaijan (AP) ? Russia does not support Turkmenistan's demands that work be stopped at contested oil fields in the Caspian Sea, Moscow's Caspian envoy said Friday.

Deputy Foreign Minister Viktor Kalyuzhny said in particular that Turkmenistan's demands for the stoppage of work at the Azeri-Chirag-Guneshli, a 4-billion-barrel oil field discovered in the 1970s that yields more than 100,000 barrels a day, could not be considered serious. Turkmenistan claims to have rights to the Azeri and Guneshli deposits, which it calls Khazar and Osman.

"In general, I think Turkmenistan has 'closed itself' up and its stance on the negotiating process on the legal status of the Caspian is not flexible enough," the Russian official said in a meeting with Azeri President Heidar Aliyev.

Grain Harvest Up 30%

MOSCOW (AP) ? Russia harvested nearly 54.9 million metric tons of grain between January and Aug. 28, up 30 percent from the same period last year, the Agriculture Ministry said Friday.

This year's yield continues the growth Russia has registered over the past two years. Russia's 2000 harvest came in at 65.4 million metric tons, 20 percent over the previous year's yield, and Agriculture Minister Alexei Gordeyev has forecast this year's total harvest at 72 million to 75 million metric tons.

CPI Forecast

MOSCOW (Reuters) ? Consumer prices are likely to stay flat or slip 0.1 percent in August month-on-month after a 0.5 percent rise in July, Interfax quoted the head of State Statistics Committee as saying Friday.

Goskomstat chief Vladimir Sokolin, quoting preliminary figures, said that "August CPI will amount to 99.9 to 100 percent."

Consumer price inflation is one of Russia's most difficult economic problems. The government, which had initially hoped to cut CPI to an annual 12 percent from 20.2 percent last year, had to revise the target to 16 percent to 18 percent.

However, independent analysts say the realistic target is 20 percent or even more. Summer price falls are traditional for Russia, when new harvest cuts vegetable and fruit prices.

PMI Shows Expansion

MOSCOW (Reuters) ? Russia's manufacturing economy showed the strongest expansion in 11 months in August on the back of surging new orders, Moscow Narodny Purchasing Managers' Index data showed Friday.

The seasonally adjusted PMI, intended to give a snapshot of business conditions, registered 55.4 in August against 54.8 in July.

PMI readings above 50 signal an increase in the manufacturing economy, while those reading below 50 signal a contraction.

"Measured overall, August saw an acceleration in the pace of the growth of the volume of new orders received to an 11-month high," Moscow Narodny Bank said in a statement.

Ruble Slips to 29.41

MOSCOW (Reuters) ? The ruble fell to a record low of 29.41 per dollar Friday as the Central Bank apparently set a new support level for the national currency at 29.42 rubles per dollar, dealers said.

The ruble's weighted average for today settlement in the key unified morning session dropped to 29.4063 rubles per dollar from 29.3708 on Thursday.

Based on the results of the unified session, the Central Bank cut its official next-day rate to 29.41 rubles per dollar from the previous 29.37 rubles per dollar.

"The dollar upturn that started yesterday continued today," said Sergei Romanchuk, a dealer at Metallinvestbank.

"When the ruble hit the lowest level of 29.45 to 29.46 per dollar on the interbank market, the Central Bank started selling dollars at 29.42. It had been selling at this level for a long time, and the market stabilized," he said.

Dealers said the Central Bank apparently sold some $100 million on the interbank market, clearly indicating a new support level.

They said the ruble was likely to slide gradually at the start of September, but did not expect it to fall below 29.50 in the first few weeks.

Gazprombank Changes

MOSCOW (MT) ? Gazprom announced Thursday that its fully owned financial arm Gazprombank will hold an extraordinary shareholders meeting at which Deputy Finance Minister Yury Lvov is expected to be appointed the bank's new chief, the Vremya Novostei newspaper reported Friday.

Gazprom chairman Rem Vyakhirev, Gazprombank board chairman Viktor Tarasov and the director of Gazprom's finance department, Dmitry Dokychyev, are expected to lose their seats on the board of directors and be replaced by Gazprom head Alexei Miller, Lvov and the deputy director of the Gazprom finance department, Natalya Oleshuk. Voting is to be carried out in absentia and should be completed by Monday.

Gazprombank is one of the countries top five banks, with 80 percent of its capital coming from Gazprom.

Oil Boost Projected

MOSCOW (Reuters) ? Russia expects to produce 336 million to 338 million tons (6.75 million to 6.79 million barrels per day) of oil and gas condensate in 2002, up from 335 million expected this year, a government forecast showed Friday.

The Forecast of Russia's Social-Economic Development in 2002 had been prepared by the Economic Development and Trade Ministry and annexed to the draft 2002 budget presented by the Cabinet to the State Duma last Sunday.

'Buy Russian Debt'

MOSCOW (Reuters) ? ING Barings said Friday it recommended investors reduce the Turkish part of their portfolios and increase their weight on Russian debt as fundamental comparisons favored Moscow.

Despite the recent positive tone over Turkey, current fundamentals do not justify its trading tighter than Russia, Philip Poole, chief economist for emerging European markets, said in a research note.

While Russia is running a fiscal surplus, Turkey's fiscal deficit this year is likely to exceed 17 percent of gross domestic product. Turkish GDP is likely to contract 6.6 percent in 2001, while Russia's economy is likely to expand by 4.5 percent 5 percent, said Poole.

$7M Dairy Loan

MOSCOW (Reuters) ? The European Bank for Reconstruction and Development, Russia's branch of Danone and KMB-Bank, EBRD's investment arm, signed a $7 million deal to help Russia's dairy sector, KMB said Friday.

Under the agreement, the EBRD will extend the eight-year $7 million loan, which KMB-Bank would distribute among farmers that cooperate with Danone, KMB-Bank said in a statement.

KMB-Bank will add another 10 percent to 40 percent to the sum.

"The program gives us a good possibility to expand our Russian activities on widening micro and small credits in the agricultural sector," KMB-Bank chairman Reiner-Mueller Hanker was quoted as saying in a statement.