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. Last Updated: 07/27/2016

Business in Brief

Unemployment Drops

MOSCOW (MT) -- Unemployment fell 15 percent year on year to 6.2 million people in 2001, Prime-Tass reported Labor Minister Alexander Pochinok as saying Tuesday.

The number of officially registered unemployed people in 2001 amounted to 1.1 million, Pochinok told a news conference. He did not provide the unemployment rate.

It was unclear whether Pochinok was speaking about the average unemployment in 2001 or the figures as of Jan. 1, 2002.

The State Statistics Committee said in January that unemployment was estimated to have dropped 9.1 percent in 2001 to 6.4 million, or 9 percent of the total workforce.

Pochinok said many people were now working without labor registration.

Chretien Arrives

MOSCOW (MT) -- Canadian Prime Minister Jean Chretien is to arrive in Moscow on Wednesday at the head of a 200-strong trade delegation looking for investment opportunities.

Chretien will be accompanied on the four-day mission by International Trade Minister Pierre Pettigrew and the heads of 12 of the country's provincial and territorial governments, including Quebec and Ontario.

Chretien is due to hold talks with President Vladimir Putin and Prime Minister Mikhail Kasyanov on Thursday before heading to Germany on a five-day trade mission beginning Sunday.

Trade between the two countries has remained tentative since the fall of the Soviet Union in 1991, amounting to some 870 million Canadian dollars ($548 million) in 2000. By comparison, trade between Russia and Germany was worth $6.9 billion during the same period, Agence France Presse reported.

Gazprom Rejects Bond

MOSCOW (Reuters) -- Gazprom said Tuesday it would not accept a $1.4 billion bond issue by Ukraine's Naftogaz to cover debts to the Russian gas monopoly until it receives all the documents.

"Ukraine's Naftogaz has not shown Gazprom the full amount of documentation regulating the issue of these bonds," Gazprom said in a statement.

"For the above stated reasons, Gazprom considers the conditions of the aforementioned intergovernmental agreement unfulfilled. Until the fulfillment of these conditions, Naftogaz's corporate bonds cannot be taken onto Gazprom's balance sheet," the statement said.

Naftogaz had planned to issue the bond by Feb. 4, but Ukrainian Fuel and Energy Minister Vitaly Gaiduk said last week that Gazprom had objected to the type of bond.

Gazprom had said it was not blocking the issue, just waiting for documentation. The company said its auditors needed to check the paperwork and receive full disclosure on the issuer.

Transport Project

MOSCOW (MT) -- The development of a transport corridor from India to Russia via Iran is one of the top priorities for the Railways and Transportation ministries, Prime-Tass reported First Deputy Railways Minister Vladimir Yakunin as saying Tuesday.

Russia, India and Iran signed an agreement on the development of the transport corridor in September 2000. Yakunin said he believed Russia could ratify the agreement this month.

The agreement is aimed at reviving a cargo transportation route that was popular during the Soviet period. Before 1991, according to Soviet statistics, an estimated 2 million tons of cargo from Europe to Iran crossed the Soviet Union on this route annually.

The corridor is designed to transport goods to and from Russia and serve as a shorter transit route between Asia and Europe.

According to some estimates, transportation costs are likely to decline by up to 40 percent in comparison with traditional routes through the Mediterranean Sea and the Suez Canal.

Most Indian cargo bound for Russia is moved either through Russia's Black Sea ports or through the Atlantic and the Baltic Sea to St. Petersburg.

Railways Growth

MOSCOW (MT) -- The Railways Ministry has increased its target for transportation growth this year to 3.5 percent from 2 percent, Prime-Tass reported Railways Minister Gennady Fadeyev as saying Tuesday.

He did not specify whether the plan applied to all kinds of transportation, but analysts said the figure was likely to refer to cargo transportation, as passenger transportation rates are set at a below-cost level.

He said the revision was due to the necessity of ensuring sufficient revenues to finance all spending plans.

Fadeyev also said the railways had failed to meet the growth target in January and needed to increase transportation at a higher pace in the remaining months.

Oil Field Development

MOSCOW (MT) -- State-owned oil company Rosneft plans to invest $140 million to develop the Prirazlomnoye oil field this year, Prime-Tass reported the Arkhangelsk regional administration as saying Tuesday.

The field, located in the Barents Sea, is being developed under a production-sharing agreement by Gazprom and state-owned oil shelf development Rosshelf, which together have 50 percent, and by Rosneft, which controls the other half, the administration said. The percentages held by Gazprom and Rosshelf were not provided.

Total investments required for the field's development are estimated at $1 billion. The r ecoverable reserves are estimated at 76.4 million tons of oil. The companies plan to start production in 2004.

The three companies are ready to develop the field together with other companies and are willing to reduce their share in the project, the official said.

Germany's Wintershall said in January it would decide on its participation in the project this autumn.

Krasugol Stake Sale?

MOSCOW (MT) -- Sergei Generalov, the major shareholder in the Krasnoyarsk Coal Co., or Krasugol, is expected to close a deal to sell his controlling stake to MDM Holding in the near future, Prime-Tass reported the Sibirskiye Novosti news agency as saying Tuesday.

The exact size of Generalov's stake in the company is not clear.

The agency said he owned 66 percent in the KATEK-Invest company, which holds 42 percent in Krasugol. Another 42 percent is held by the local administration, while a miners union holds 6 percent. The owners of the remaining 10 percent were not given.

The agency said Generalov and MDM are in the last stage of talks and the deal is expected to be finished "soon."

Ferrous Metal Value

MOSCOW (MT) -- The value of ferrous metal exports decreased 8.5 percent year on year to $5.675 billion, Prime-Tass reported the State Customs Committee as saying Tuesday.

The value of ferrous metals exported outside the Commonwealth of Independent States fell 9.6 percent year on year to $5.423 billion.

Coal Exports Rise

MOSCOW (MT) -- Coal exports rose 10.5 percent year on year to 47.4 million tons in 2001, Prime-Tass reported a State Customs Committee official as saying Tuesday.

The value of the coal exports rose 27.3 percent year on year to $1.4 billion, the official said. Coal exports outside the Commonwealth of Independent States rose 12.9 percent to 42.1 million tons, worth $1.2 billion.

Export of coke and semi-coke was up 38.6 percent year on year to 2.1 million tons worth $112 million, including non-CIS exports, which rose 19 percent to 1.1 million tons worth $49.4 million.

Russia's total coal output rose 4.3 percent year on year to 269 million tons in 2001.

2002 St. Pete Borrowing

MOSCOW (MT) -- St. Petersburg's City Hall may borrow up to $150 million abroad in the second half of this year, Interfax reported Deputy Governor Viktor Krotov as saying Tuesday.

City Hall has not yet decided how it will borrow the funds, Krotov told reporters. "The possibilities of a new issue of Eurobonds or raising a syndicated loan are being considered," he said, adding that the money will be used for investment projects.

Krotov said St. Petersburg does not plan to buy back previously issued Eurobonds ahead of schedule. "The high price of the bonds makes buying back the paper unjustified," he said.

The outstanding $100 million in Eurobonds will be redeemed in June 2002, Krotov said. St. Petersburg placed $300 million in Eurobonds in 1997 with an annual coupon yield of 9.5 percent paid semiannually. The bond issue was lead-managed by investment bank Salomon Brothers.