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. Last Updated: 07/27/2016

Business in Brief

Oil, Gas Grab?

MOSCOW (MT) -- The Kremlin administration has prepared a draft bill that envisions the government taking control of Russia's oil and gas reserves and output, Vedomosti reported Friday.

The bill would amend the law on subsoil resources, thus canceling oil companies' production licenses, and would make the government the owner of all crude oil extracted by these companies.

Analysts said the bill was unlikely to be approved by the government and the State Duma.

According to Vedomosti, the Kremlin wants to offer oil companies "concessions" to extract oil for a fee while the government would have the rights to reserves and output.

Dmitry Kozak, the deputy head of the Kremlin administration, told Vedomosti that the introduction of concessions would make relations between private owners and the state in accordance with the law. "It will provide guarantees for both sides," he said without elaborating.

Kozak said the bill will be approved by the government by Nov. 1 and then sent to the Duma.

Market watchers were dumbfounded.

"Clearly, this measure would mean a de facto nationalization of the Russian oil sector, which in turn would have grave implications for the country," the Aton brokerage wrote in a comment.

Poland Probes LUKoil

LODZ, Poland (Reuters) -- Polish Prime Minister Leszek Miller on Saturday said he would probe the "political context" of a planned sale of the country's No. 2 refinery to a consortium including oil giant LUKoil.

Miller's overt reference to the politicized nature of the deal highlights the still-uneasy and highly centralized investment relationship between the two neighbors, despite a recent thaw in Warsaw-Moscow relations.

Miller said treasury minister Wieslaw Kaczmarek had picked private British-based group Rotch Energy and LUKoil to buy 75 percent of Rafineria Gdanska for an estimated $1 billion in equity and investment pledges.

"The treasury minister told me that the Rotch and LUKoil group [was picked]. From the economic side, their offer is interesting, but there is also a political context that requires investigation," Miller told reporters. "This political context results from the fact that a powerful Russian firm is interested in the privatization of a Polish refinery," he said, adding that the probe would be carried out over the "nearest weeks."

Sibur Recovers Assets

MOSCOW (Prime-Tass) -- The country's largest petrochemical company, Sibur, has re-established control over its Sibur-Tyumen subsidiary, Sibur president Dmitry Mazepin said Friday.

Sibur-Tyumen will be recovered within Sibur's vertically integrated holding through the coordinated efforts of state agencies and Gazprom, which has a 51 percent stake in Sibur.

Sibur is now facing bankruptcy proceedings because it is unable to pay off its mounting debt. Sibur's debts amount to about $1.5 billion, including about $1 billion owed to Gazprom.

Ruble Firms

MOSCOW (Reuters) -- The ruble firmed against the dollar Friday as local companies continued selling dollars to meet end of the month tax liabilities due early this week.

In the unified trading session of eight exchanges, which serves as the basis for the Central Bank's next-day ruble/dollar rate, the ruble recovered the bulk of its Thursday's weakness and rose by 3 kopeks to a weighted average for today settlement of 31.5069.

Trademark Ruling

MOSCOW (Vedomosti) -- The Supreme Court has annulled a government resolution boosting the cost of registering trademarks and patents 30 times to 8,500 rubles ($270).

The case was brought by the Zhigulyevskoye Pivo brewery, which is planning to register 15 trademarks. The company argued that patent duties can only be established by a federal law as stated in the Tax Code and the Constitution.

Last week's decision, which has already come into effect, will return registration fees to the level set in 1997, when companies paid 300 rubles and foreign companies $300 to register their trademarks and patents.

Alexander Shelemekh of the Coalition for Intellectual Property Rights said the rates would have to be unified to comply with requirements of the World Trade Organization, which Russia is hoping to enter next year.

More Crude to U.S.

LONDON (Reuters) -- Yukos has chartered its third very large crude carrier (VLCC) to carry another 2 million barrels of Urals crude to the United States, shipping sources said Friday.

Although first seen as political gestures meant to illustrate closer energy relations between the world's top consumer of energy and the No. 2 oil exporter, the monthly shipments are now taking on a bigger market role, traders say.

Yukos officials said earlier this month that they would send five or six VLCCs to the United States this year in a pilot program to test the financial feasibility of the massive long-haul shipments, the first ever for the Urals grade.

The first VLCC was sold to ExxonMobil in June, marking the first time Russian oil was sold directly into the United States. The second ship sailed in July.

Chechen Gas Stations

GROZNY (Prime-Tass) -- State oil company Rosneft is expected to set up a gasoline station network in Chechnya, Itar-Tass quoted Chechen Prime Minister Stanislav Ilyasov as saying.

Ilyasov said "it will deal a serious blow to the illegal oil business in the republic undermining its economic base."

Rosneft, which accounts for 100 percent of Chechnya's oil production, was ordered by the federal government to set up the network.

Neither the time frame for the creation of the network nor the number of gasoline stations has been determined, a company source said.

TGIF at Sheremetyevo

MOSCOW (Vedomosti) -- The Rosinter restaurant group has announced plans to invest $500,000 in a TGI Friday's to be located in Sheremetyevo Airport's Terminal 2.

Rosinter won a tender to build a fast-food outlet that Sheremetyevo announced in June. Mega Foods 2000, Rosbagel and Luis Ltd. and Aeropit also participated.

Rosinter is expecting monthly turnover of $100,000 at the restaurant, which will have an area of 200 square meters on the second floor of the departure hall.

Sheremetyevo will receive $90,000 per year in rent, plus 6 percent of turnover.

For the Record

State arms exporter Rosoboronexport projects Russia's arms exports to rise 15 percent this year from $3.7 billion in 2001, a company spokesman told Itar-Tass at the Farnborough air show in Britain. He said the company's orders portfolio now stands at $13.5 billion. (Prime-Tass)

The Finance Ministry will submit a draft 2003 federal budget to the government Aug. 8, Interfax reported Deputy Prime Minister Alexei Kudrin as saying Friday. The government will discuss the draft Aug. 15 and it will be submitted to the State Duma by Aug. 28, Kudrin, who is also finance minister, told a news conference. (MT)

Gazprom received a $200 million two-year credit line in June from Dutch bank ABN AMRO and German specialist lender DePfa, the company said in a statement Friday. The loan, which is Gazprom's first to be structured over two years, will be used for general corporate purposes, the statement said. (Reuters)

Energomash, the nation's leading engineering firm for liquid-fueled rocket engines, has delivered 13 of 50 rockets contracted by U.S. aerospace giant Lockheed Martin under a $500 million deal. The engines will power Lockheed's Atlas rockets. (MT)

Timber holding Ilim Pulp Enterprise is expected to start construction shortly on a new $36 million timber-processing facility at its Kotlas timber plant based in the Arkhangelsk region, the company said Friday. The facility, scheduled to start operating by the end of 2003, is designed to process up to 800,000 cubic meters of timber per year. (Prime-Tass)