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. Last Updated: 07/27/2016

Business in Brief

Big 5 Hearing

MOSCOW (MT) -- In the wake of U.S. energy giant Enron's bankruptcy, the Federal Security Commission will hold a hearing on the activities of the Big Five auditing firms in Russia on Feb. 27.

The hearing is expected to include the testimony of audit firms' representatives, experts and businessmen.

The decision was prompted by recent scandals involving the bankruptcies of Enron and U.S. telecommunications company Global Crossing, but the commission has a wider list of issues to discuss, its spokesman said Wednesday, adding that further details will be available closer to the hearing.

Gas Tariff Hike

MOSCOW (MT) -- The Federal Energy Commission on Wednesday approved a 20 percent hike in gas transportation rates for independent producers from March 1, Prime-Tass reported.

Gazprom controls Russia's gas transportation system, while the FEC regulates gas transportation rates through Gazprom's pipelines for independent gas producers.

FEC Chairman Georgy Kutovoi said last week the increase was necessary because Gazprom was suffering losses from transporting independent producers' gas.

Gas transportation rates in Russia have not been changed since 2000.

Some independent gas producers have expressed worries that higher transportation rates might render their gas output unprofitable as they will be unable to cover costs for delivery to the Commonwealth of Independent States.

But analysts said international gas trader Itera is the only company among independent gas producers in Russia that has sufficient volumes of gas exports to be hurt by the increased rates.

LUKoil's Big Gas Plans

LONDON (Reuters) -- No. 1 oil producer LUKoil is planning a 14-fold jump in natural gas production by 2010 with the aim of raising exports 50-fold, a senior company executive said.

Andrei Gaidamaka, LUKoil's deputy director of investment strategy, said gas output would rise to 69.3 billion in 2010 and 84.3 billion in 2020 from 5 billion cubic meters in 2000.

"Significant growth is likely to come from LUKoil's Caspian reserves, and new volumes will be monetized through liquefied natural gas projects and through the buildup of pipeline export volumes," Gaidamaka told an oil conference in London on Tuesday.

He said the aim was to ramp up exports from just 10 percent of total output in 2000 to 35 percent by 2010 and 50 percent by 2020, with the remainder sold on the domestic Russian market.

That would take total exports from just 500 million cubic meters in 2000 to 24.5 bcm in 2010 and 42 bcm in 2020.

Ukraine Bond Talks

KIEV (Reuters) -- Ukraine's state oil and gas company, Naftogaz Ukrainy, said Wednesday it was still locked in talks with Gazprom over a delayed Eurobond issue to cover gas debts.

Ukraine's landmark deal to settle $1.4 billion of debts owed to Russia for gas supplies ran into trouble earlier this month. Naftogaz had been due to issue the Eurobonds on Feb. 4.

Kiev said Gazprom had objected to the type of bonds it would receive for the debts. Gazprom denied that, but said it would not accept the bonds until it had received all the documents regarding the issue.

Ukrainian government officials have said they had hoped to resolve the issue by the end of last week.

But Naftogaz Ukrainy head Yury Boiko told reporters Wednesday that the two companies were continuing talks.

Baltika RAS Profits Up

MOSCOW (MT) -- Top brewer Baltika's net profit to Russian accounting standards rose 76 percent year on year to 4 billion rubles ($129.8 million) in 2001, Prime-Tass reported the company as saying Wednesday.

Baltika's 2001 revenues rose 61 percent year on year to 15.7 billion rubles on beer sales of 140 million decaliters, up 32 percent year on year, the company said in a press release.

The company invested $115 million into its operations in 2001, a record high since the company was founded in 1990.

Baltika's share of Russian beer production rose to 22.5 percent last year from 20.1 percent in 2000.

Ruble Rallies

MOSCOW (Reuters) -- The ruble rallied against the dollar Wednesday as key market players were seen buying rubles for clients to pay their monthly taxes, dealers said.

After an initial fall, the ruble firmed against the dollar in early trade to a weighted average for today settlement of 30.8840 to the dollar after 30.8949 Tuesday. Deals worth $118.79 million registered during the official unified session.

Based on the unified session results, the Central Bank set its official next-day ruble rate at 30.8840 versus 30.8949 previously.

Gazprom Investment

MOSCOW (MT) -- The government will consider Gazprom's investment program for 2002 at a meeting on March 14, Interfax reported Federal Energy Committee Chairman Georgy Kutovoi as saying Wednesday.

Mikhail Akselrod, Gazprom's head of investment, has said the company is insisting the amount of investments in priority projects should be 140.8 billion rubles ($4.6 billion), while the government has said the figure should be 124.3 billion rubles and the shortfall should be raised by selling low-profile assets for 16 billion rubles.

Gazprom's investment program was approved by the government at the end of December, but recommendations for improvement were given.

Romanian Pipe Buy

MOSCOW (MT) -- The Sinarsky Pipe Plant is to buy a controlling stake in Romania's Artom pipe plant, news agencies reported Sinarsky spokeswoman Natalya Levitskaya as saying Wednesday.

Sinarsky was bought last week by MDM Group's pipe division, Pipe Metals Co., or TMK, and rival United Metals Co., or OMK.

Artom has capacity to produce 200,000 tons of pipe per year. No.1 OMK produced over 1.5 million tons of pipe last year, while TMK produced more than 1 million tons and Sinarksy 540,000 tons.

Ice Cream Exports Rise

MOSCOW (MT) -- Russian ice cream exports rose 8.8 percent year on year to 11,100 tons in 2001, while imports fell 11 percent to 3,200 tons, Prime-Tass reported the Russian Union of Ice Cream Manufacturers as saying Wednesday.

In 2000 and 1999, Russia exported 10,200 tons and 8,900 tons, respectively.

Union chairman Vyacheslav Vygodin said he expects ice cream exports to increase further over the next years.

Imports of ice cream have continued to fall over recent years from a peak of 19,000 tons in 1998 to 5,700 tons in 1999 and 3,600 tons in 2000.

Pulkovo Traffic Up

MOSCOW (MT) -- Passenger traffic via St. Petersburg's Pulkovo Airport rose 8.8 percent in the year to January to 166,300 passengers, Prime-Tass reported the airport's operator as saying Wednesday.

Pulkovo Airport is operated by state-owned Pulkovo Co., which also owns Pulkovo Airlines.

New Power Operator

MOSCOW (MT) -- The Atomic Generating Co., which unifies Rosenergoatom's existing atomic power plants and all atomic power plants under construction, will begin operating March 1, Oleg Sarayev, the recently appointed Rosenergoatom general director, said Wednesday.

The state-controlled company will act as energy supplier and collect all payments, he said.

Media had reported earlier that Sarayev replaced the former director in order to jump start the consolidation process.

For the Record

Prime Minister Mikhail Kasyanov has signed a ruling issuing quotas for 2002 exports of platinum group metals, Prime-Tass reported a source in the state precious metals depository as saying Tuesday. The Gokhran source did not elaborate and further details were available. (MT)

Perm-based fixed-line operator Uralsvyazinform plans to boost net profit 169 percent year on year in 2002 to $3.5 million, Prime-Tass reported the company as saying Tuesday. (MT)

Russia produced 434,666 tons of white sugar from imported raws from the start of the year to Feb. 19, down from 469,382 tons in the same period last year, the Russian Sugar Producers' Union said Wednesday. (Reuters)