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. Last Updated: 07/27/2016

Business in Brief

$200M Oil Field Loan

MOSCOW (Reuters) -- The European Bank for Reconstruction and Development and HypoVereinsBank have arranged a $200 million loan to SeverTEK, created to develop a Russian oil field north of the Arctic Circle, the EBRD said Monday.

SeverTEK is an equal partnership between LUKoil and Finland's Fortum.

The EBRD said in a statement that the six-year loan would be used to finance drilling and the construction of a pipeline and other infrastructure needed to bring on-stream SeverTEK's largest field in the Timan Pechora basin.

The field has proven plus probable reserves of 164 million barrels of oil. The estimated cost of the project is $355 million, the statement said.

Chinese Pipe Stakes

BEIJING (Reuters) -- Oil giants Royal/Dutch Shell, ExxonMobil and Gazprom have agreed to each hold 15 percent stakes in China's proposed $20 billion, 4,000-kilometer natural gas pipeline project, company officials said Monday.

The companies signed a memorandum of understanding that said for the first time ExxonMobil would join the Shell-led consortium hoping to join China's PetroChina on the huge west-east pipeline, company officials said.

Banking Stumble

MOSCOW (MT) -- The government's pledge to move out of the banking sector faltered Monday at the first stage -- getting government entities to transfer their bank shares to the Property Ministry.

"The situation is not very good," an official from the Property Ministry said. According to Izvestia, only one government entity transferred its bank shares.

Prime Minister Mikhail Kasyanov in April ordered government entities to transfer their stakes in more than 400 banks to the Property Ministry by a July 1 deadline.

A source at the Property Ministry said the ministry hopes the government will decide on a strategy later this week for dealing with the lack of response.

VGTRK Eyes Euronews

MOSCOW (MT) -- All-Russia State Television and Radio Broadcasting Co., or VGTRK, plans to increase its share in Euronews, a 24-hour channel broadcast in seven languages, including Russian, around Europe.

It currently has a 1.8 percent share in Secemie, a European consortium of 20 public television companies, and wants to increase it to about 20 percent, said RTR's Euronews project manager Andrei Bystritsky.

Kommersant reported sources close to the talks as saying the stake might be sold to VGTRK for about $20 million.

Alcohol Amendments

MOSCOW (MT) -- The State Duma approved amendments to the law on production of ethyl alcohol and alcoholic beverages in its second and third reading, Interfax reported Monday.

Wine producers now will have to fit meters to measure production of wine, Interfax reported.

$4.2Bln Budget Surplus

MOSCOW (Prime-Tass) -- The federal budget surplus amounted to 132.2 billion rubles ($4.2 billion) in January to April, versus 86.7 billion rubles in the same period of 2001, the State Statistics Committee said Monday. Federal budget revenues totaled 656.8 billion rubles in January to April, including 498.1 billion rubles in tax revenues.

Federal budget spending was at 524.6 billion rubles in January to April, including 80.5 billion rubles spent on servicing state debt.

MDM Wins Bank War

MOSCOW (Vedomosti) -- MDM-Bank has bought an 18.35 percent stake in Konversbank from TVEL Corp. for $12 million.

Earlier, TVEL had concluded an agreement to sell 18.35 percent of the Konversbank shares for $12 million to Alfa Bank.

But the deal between Alfa Bank and Tvel was annulled last Thursday due to court injunctions issued on MDM-Bank's behalf. The shares were then sold to MDM for $12 million, a TVEL representative said.

An MDM-Bank official who declined to be identified said the bank now owns 85 percent of Konversbank.

Gazprom Stake

MOSCOW (Vedomosti) -- Germany's Ruhrgas has acquired a further 0.3 percent of Gazprom shares on the local market over the past year, Ruhrgas head Burkhard Bergmann said.

Ruhrgas now controls 5.3 percent of the gas monopoly. Based on current prices, a 0.3 percent stake costs $68.8 million on the internal market and $116.5 million on the overseas market.

Bergmann said that he aims to control 8 percent to 10 percent of Gazprom.

RTR Goes West

MOSCOW (MT) -- RTR-Planeta channel began broadcasting to Western Europe on Monday.

Produced by the RTR station, the channel is a mix of RTR news and entertainment shows, Kultura channel programs and Russian-language Euronews. The channel is broadcast free of charge and is targeted at the Russian-language audience -- mainly immigrants from the former Soviet Union.

ORT plans to start broadcasting its ORT International channel to the United States in September this year, said the company's spokesman, Oleg Goryachev. It is to begin its test broadcasting later this month.

Moskva Overhaul

MOSCOW (MT) -- City planners have decided they need to demolish the Hotel Moskva in order to save it.

At a Friday meeting of the city's planning committee, Mayor Yury Luzhkov said the hotel on Manezh Square is a historic monument, but it does not meet contemporary standards of comfort.

City architect Alexander Kuzmin said the new hotel and business center will incorporate Alexei Shchusev's original design and some of his ideas that could not be achieved in 1935.

Shalva Chigirinsky, head of ST Group, said the reconstruction project would be run by a company 50 percent owned by his company and 50 percent by City Hall, Interfax reported. Investors are being sought.

Chigirinsky estimated the project's total cost at $300 million to $400 million.

Retail Developers Unite

MOSCOW (MT) -- A national chapter of the International Council of Shopping Centers was formed last week.

The local Council of Shopping Centers plans to promote the role of shopping centers, better communication, exchange of information, training of personnel and the improvement of business ethics, the council said in a statement.

Michel Pascalis, managing director of Jones Lang LaSalle in Central and Eastern Europe, was elected to be the first president, with other officers representing Garant Invest, PMCo, M-Video, IKEA, Ramenka, the Economic Development and Trade Ministry, Perekryostok, Auchan, Detsky Mir, Rosinter, Piter, MiG, GUM, TsUM and Engeocom KRK.

Alrosa Dividend Up

MOSCOW (Prime-Tass) -- Diamond giant Alrosa's annual general meeting approved dividends of 3,000 rubles ($95) per share for 2001, the company said in a statement Monday.

Alrosa paid 2,000 rubles in 2000 dividends. The company's net profit amounted to 9.0662 billion rubles in 2001, almost unchanged on the year, the statement added.

For the Record

The volume of VAT expected to be returned to exporters from this year's federal budget is about 220 billion rubles ($7 billion), Interfax reported Tax Minister Gennady Bukayev as saying Monday. (MT)

The volume of underpaid tax to the federal budget was 17 billion rubles ($540 million) in the first half of the year, RosBusinessConsulting reported Deputy Finance Minister Alexei Ulyukayev as saying Monday. (MT)

Vneshekonombank's net profit increased 27 percent year on year in the first quarter to $33 million, a VEB official said Monday. (Prime-Tass)

The nonferrous metals industry posted a 9.1 percent year-on-year production increase in January to May, the State Statistics Committee said Monday. (Prime-Tass)

Domestic steel companies produced a total of 24.2 million tons of steel in January to May, down 0.8 percent year on year, the State Statistics Committee said Monday. (Prime-Tass)

Gazprombank's 200 million euro-denominated ($200 million) Eurobond to be issued this year will have a yield of no more than 10 percent, the bank said Monday. (Reuters)

The State Customs Committee collected 47.5 billion rubles ($1.5 billion) in duties to the federal budget in June, exceeding the government target by 7 percent, the committee said in a press statement Monday. (Prime-Tass)

The manufacturing economy extended its growth, with the Purchasing Managers Index rising from 51.3 in May to 52.6 in June, Moscow Narodny Bank said Monday. (Reuters)