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. Last Updated: 07/27/2016

Business in Brief

Vershbow on Iraq

MOSCOW (AP) -- The U.S. Ambassador to Russia said Monday that Russia's economic commitments would be "better protected" in Iraq under a new government there, arguing that Russian and U.S. interests aren't as different as some skeptics say.

Russia's considerable investments "could be better protected under new leadership in Iraq," Alexander Vershbow said at a round-table discussion on the fallout of the Sept. 11 attacks.

U.S. officials will be traveling to Moscow in the near future to make their case for a change of government in Iraq.

Ingosstrakh Changes

MOSCOW (MT) -- Troika Dialog board member Alexander Mamut and the MAKS insurance company have either already acquired or soon will acquire 25 percent stakes in insurance giant Ingosstrakh, Vedomosti reported Monday, citing sources close to the deal.

The newspaper quoted an Ingosstrakh board member as saying information on new shareholders will be available by the end of the month. He neither confirmed nor denied Mamut and MAKS as the new shareholders.

DIY Giant Eyes Russia

MOSCOW (Vedomosti) -- German do-it-yourself retailing giant OBI is preparing to open its first homeowners outlet outside Moscow. The company already has a Russian partner, the owners of suburban MEGA shopping center. MEGA and OBI are to sign a leasing contract this week.

The hypermarket chain is in a good position to become Russia's first foreign DIY outlet. OBI president Harald Lux said a lease agreement is to be signed in the near future.

The German retailer is to rent 12,000 square meters in MEGA's suburban Komunarka shopping complex for 10 years with prolongation rights. Creating the hypermarket is expected to cost OBI around $5 million.

MinFin Debt

MOSCOW (Reuters) -- The government will start reducing its debt to the Central Bank in 2004 after it meets its foreign debt repayment peak of about $17 billion next year, Deputy Finance Minister Sergei Kolotukhin said Monday.

The Finance Ministry borrowed more than $6 billion from the Central Bank after the 1998 financial crisis to service the country's foreign debt.

The ministry will repay $700 million of the principal debt to the Central Bank in 2004, with another portion of $1.2 billion to be redeemed in 2005, Kolotukhin said.

$39.6M EU Grant

MOSCOW (Reuters) -- The European Investment Bank plans to invest 40 million euros ($39.6 million) in two water treatment projects in Russia and is considering a third worth 40 million euros, bank president Philippe Maystadt said Monday.

He said the framework agreement for the first two projects, water treatment plants in St. Petersburg and Kaliningrad worth 25 million euros and 15 million euros, respectively, would be signed in November.

Gazprom Roadshow

MOSCOW (Reuters) -- Gazprom plans to start a roadshow for its bond issue in the United States on Sept. 26, brokerage United Financial Group said Monday.

UFG, a Gazprom minority shareholder, said in a report after meeting Gazprom's key executives last week that the company planned to issue a bond of between $400 million and $1 billion with a duration of 10 years.

Gazprom's CEO, Alexei Miller, told reporters in August that a $750 million bond roadshow was scheduled to start in the United States in October, and the firm also planned another $400 million issue this year.

Gazprom declined to comment Monday.

New Eurobond Issue?

MOSCOW (Prime-Tass) -- Russia is expected to issue new Eurobonds in 2002 if the situation on foreign markets is favorable, Deputy Finance Minister Sergei Kolotukhin said Monday.

He said current foreign-market trends were unfavorable for Russia, Russian Eurobonds were falling and yields to redemption on previously issued bonds were quite high.

If Russia enters the markets with new Eurobonds in September, borrowing will be much more expensive, Kolotukhin said.

Algerian Oil Plan

ALGIERS, Algeria (Reuters) -- Algerian state-owned oil and gas firm Sonatrach and Russia's Oil and Gas Industries Association signed a draft oil cooperation accord Monday, the official Algerian news agency APS reported.

"This accord specifies the cooperation actions in upstream and downstream of the oil activity," said APS, quoting a statement from the Energy Ministry.

It said the two sides would set up a joint working group to work out the cooperation program between the two countries.

Right-Hand Drive

MOSCOW (Prime-Tass) -- The government plans to develop rules for the use of cars with right-hand steering wheels instead of imposing an outright ban, Industry, Science and Technology Minister Ilya Klebanov said Monday.

He added that the rules should be in place by January 2003.

Klebanov said a ban on cars with right-hand steering could only be possible when the government found "a sound alternative to offer their owners."

Coal Price Plan

MOSCOW (Prime-Tass) -- Domestic coal and gas prices should equalize by 2006, Energy Minister Igor Yusufov told a press conference Monday.

He said that domestic gas prices would rise to $40 to $45 per thousand cubic meters by that year from the current $24 per thousand cubic meters.

The Energy Ministry plans to use this figure as it prepares a coal-industry development strategy until 2020, Yusufov said.

Coal prices currently exceed gas prices on the domestic energy market.

Debt Plan Snubbed

KIEV (Prime-Tass) -- Russia has proposed that Ukraine's debt for Russian natural gas be used as Russia's share in the international gas pipeline consortium, First Deputy Head of the Ukrainian parliament's fuel and energy committee Nikolai Martynenko said Monday.

He said the proposal is unacceptable for Ukraine because its gas debt to Russia now stands at $1.4 billion, while Ukraine's pipeline system is estimated to cost $13.8 billion.

For the Record

Russia favors raising tariffs on oil pumping via the Caspian Pipeline Consortium from $26 to $38 per ton, Energy Minister Igor Yusufov said Monday. (Prime-Tass)

The volume of Russia's MinFin tranche 4 external bonds has been reduced by $1.4 billion to $2.06 billion, Deputy Finance Minister Sergei Kolotukhin said. (Reuters)

The federal budget surplus amounted to 124 billion rubles ($3.9 billion) in January-August, a government source said Monday. Federal budget revenues totaled 1.389 trillion rubles during the period, while spending amounted to 1.265 trillion rubles. (Prime-Tass)

The Tax Ministry transferred 123.7 billion rubles ($3.9 billion) in taxes to the federal budget in August, 1.2 percent below target, the ministry said Monday, without providing any comparative figures. The ministry's receipts account for about two-thirds of the government's budget revenues. (Prime-Tass)