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. Last Updated: 07/27/2016

Business in Brief

Enough Winter Fuel

MOSCOW (AP) -- Russia has enough stored fuel to ensure that the country stays warm this winter, the head of electricity monopoly United Energy Systems said Wednesday, Interfax reported.

"We are prepared for the winter and the heating season will go without any regional crises," the news agency quoted UES chief Anatoly Chubais as saying.

He said Russia has stockpiled 23.4 million metric tons of coal and 3.3 million tons of fuel oil -- marking the first time that the country has 100 percent of its fuel reserves ready ahead of winter.

Last year, UES also reported being well-stocked, but municipal entities -- directly responsible for heating apartments -- still struggled with shortages.

$1Bln UES Investment

MOSCOW (Prime-Tass) -- Unified Energy Systems plans to allocate $1 billion for investments in 2003, UES chief Anatoly Chubais said Wednesday.

UES's capital investments already rose 26 percent year on year in 2001 to 45.2 billion rubles.

Chubais said the federal budget would not allocate funds in 2003 for the power sector, but that the government should reconsider the issue.

The government should invest in the construction of the Bureya hydroelectric power plant, which was likely to improve power supplies in the Far East, he said.

Coal stocks at UES's power plants were 23.4 million tons as of Oct. 15, above target by 10.4 percent, while fuel oil stocks were 3.25 million tons, above target by 3.9 percent, Chubais said.

Sberbank Upbeat

MOSCOW (Prime-Tass) -- State-owned Sberbank's net profit for 2002 was likely to exceed the originally projected 27.5 billion rubles ($870 million), Sberbank's deputy chairwoman said Wednesday.

Sberbank's financial results for January to September this year are in line with the bank's target according to preliminary estimates, Alla Alyoshkina told journalists.

"It is possible that the full-year financials will be slightly above what was planned," she said.

Alyoshkina also said Sberbank's loan portfolio currently totals 470 billion rubles. No comparative figures were provided.

CB: Reserves to Slow

MOSCOW (Prime-Tass) -- The growth of the Central Bank's hard currency and gold reserves should slow down as a sharp increase could lead to higher growth of the money supply, Central Bank Chairman Sergei Ignatyev said Wednesday.

The current amount, however, should satisfy all requirements, Ignatyev told the State Duma without elaborating.

The Central Bank's hard currency and gold reserves rose $500 million to $45.9 billion in the week ending Oct. 4.

Ignatyev also confirmed that Russia's 2002 inflation rate was unlikely to exceed 14 percent.

Insurance Plan

MOSCOW (Vedomosti) -- Gazprom is merging SOGAZ and Gazprommedstrakh, its two insurance subsidiaries, and will sell 46 percent of the new company to a strategic investor, SOGAZ general director Alexei Olshansky said Tuesday.

Gazprom wants to sell the stake to one or several Western insurance companies. The gas monopoly would retain a 51 percent stake and use the company to insure its numerous social programs, a Gazprom official said.

The remaining 3 percent would remain with SOGAZ management.

Gazprom in Hungary

BUDAPEST, Hungary (Reuters) -- Hungary's center-left government said Wednesday it was in favor of selling its remaining 25 percent stake in oil and gas group MOL, the country's biggest revenue earner.

Economics Minister Istvan Csillag told journalists there would be no political obstacle to energy giant Gazprom, Hungary's main supplier of natural gas, bidding for part of MOL, as long as this was done openly and in line with stock market rules.

Csillag said he saw no political barrier to improved Russia-Hungary cooperation in the petrochemicals industry either, but added this was up to companies rather than governments.

But he stressed that any deals must be open and above board.

"We don't want to have anybody in disguise," he said.

Gazprom caused a storm on Hungary's markets in 2000 when its proxies built up stakes in Hungary's BorsodChem chemicals group, prompting changes to market rules on hostile takeovers.

Rostelecom Buy

MOSCOW (Prime-Tass) -- State-controlled telecommunications company Rostelecom has bought a 50 percent stake in the Moscow-based Vestelcom company from U.S.-based RTDC Holdings Inc. for $15 million, Rostelecom said Wednesday.

Rostelecom now has full ownership in Vestelcom, which controls three international telephone exchanges in Moscow and St. Petersburg and allows for participation in international cable systems.

Vestelcom was created in 1992 by Rostelecom and the American telecommunications company, U.S. West. Both companies paid $17.4 million for 50 percent stakes.

The U.S. West stake was later bought by RTDC Holdings Inc.

CMTP Stakes

MOSCOW (MT) -- German tiremaker Continental AG has a 76 percent stake in its joint venture with city-owned Moscow Tire Plant, Continental chairman Manfred Wennemer said Wednesday.

Continental, the No. 2 tiremaker in Europe, has been in talks with the plant since 1998 over forming the Continental-Moscow Tire Plant, Wennemer said at a news conference, adding that "they were a hard, but fair, negotiating partner."

Continental has promised to invest 30 million euros ($28 million) over the next three years into CMTP, which will be located at the Moscow Tire Plant.

The Moscow Tire Plant has pitched in $10 million worth of real estate, said the plant's general director, Vladimir Yezhov.

CMTP will launch production in fall 2003 and employ 500 people. The venture is expected to produce 3.5 million tires per year by 2006.

Yezhov said that production would decrease at the Moscow Tire Plant while the equipment for CMTP is being installed. Continental is removing the equipment from one of its factories in Sweden that has shut down.

Diamond Suit Dropped

MOSCOW (MT) -- A Colorado court has dismissed Archangel Diamond Corp.'s suit against LUKoil and the oil major's mining subsidiary, saying that it lacked jurisdiction over the defendants, ADC said in a statement Wednesday.

Canada-based ADC, which has offices near Denver, accuses LUKoil and Arkhangelskgeoldobycha of breach of contract for not transferring the license for a $5 billion mine in the Arkhangelsk region to an ADC-Russian joint venture.

ADC is seeking $1.2 billion in compensatory damages and $3.6 billion in punitive damages.

ADC is considering appealing the decision.

Alcohol Output Surges

MOSCOW (MT) -- Russia produced 95.3 million dekaliters of vodka and other spirits in January to September -- a 9 percent increase year on year -- Interfax reported the Agriculture Ministry as saying Wednesday.

Cognac output experienced the greatest growth, leaping 32 percent year on year, while wine surged 24 percent.

Meanwhile, the National Alcohol Association reported that 23,581 people died from alcohol poisoning in the first seven months of the year, 1,801 more than during the same period last year.

The Voronezh region experienced the largest rise, where the death rate more than doubled.

CPI Grows 0.8%

MOSCOW (Reuters) -- Russia's consumer price inflation index rose 0.8 percent between Oct. 1 and Oct. 14 after a 0.4 percent monthly rise in the whole of September, the State Statistics Committee said Wednesday.

The average daily inflation in the first 14 days of October was 0.059 percent compared with a 0.013 percent rise in September. The average daily inflation was 0.035 percent last October, the committee said in a statement.

The government is seeking to keep inflation under 14 percent this year, compared with 18.6 percent in 2001.

Most analysts consider that target overly optimistic. The Central Bank has also indicated that consumer prices could rise by up to one percentage point above the 2001 offical target.