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. Last Updated: 07/27/2016

Business in Brief

Tatneft Profit Falls 38%

MOSCOW (Reuters) -- Profit at the country's sixth-largest oil producer, Tatneft, fell 38 percent in 2002 under local accounting standards, the company said Monday, as costs rose and oil production remained flat.

The company said in a statement it expected pretax profit to fall to 11.90 billion rubles ($374.2 million) from 19.32 billion rubles in 2001.

Tatneft said its sales would rise in 2002 by 6.4 percent to 107 billion rubles, but its lifting costs would rise 41 percent to 1,844 rubles per ton as a result of changes in taxation.

Russia's oil production is currently standing at a 10-year high of 8 million barrels per day. Almost all major oil firms are showing double-digit output growth, except Tatneft, whose output was flat in 2002 at around 500,000 bpd.

The firm produces the bulk of its crude from ageing fields in the republic of Tatarstan and near the Volga River.

CB Holds Ruble Down

MOSCOW (Reuters) -- The Central Bank kept a tight grip on the foreign exchange market Monday, stepping in to brake the ruble's rise against the dollar ahead of a looming tax deadline.

In the unified trading session of eight exchanges, which usually serves as the basis for the Central Bank's ruble/dollar rate the next day, the ruble edged higher to a weighted average for settlement today of 31.8001 from 31.8015 on Friday.

Dealers said the Central Bank was capping the ruble at 31.80, its preferred rate since last week, when Russian firms began selling dollars to raise enough money to pay their taxes at the end of January.

"Trade volumes suggest that the Central Bank has been buying [dollars] in the unified session at 31.80 … filling its reserves and injecting rubles to improve market liquidity," said a dealer with a foreign bank.

Tax payments are due around the 29th of each month and normally generate a higher demand for rubles.

Norilsk Talks Continue

MOSCOW (Reuters) -- The management and unions of Norilsk Nickel will press ahead with talks Tuesday aimed at preventing a wage strike at the metals giant's key Arctic division, a union head said Monday.

Strike fears at the world's largest nickel producer has kept nickel prices on the boil in recent days, sending them to 2 1/4-year highs last week.

The division's management said it could call an extraordinary general conference of employees and address them directly if negotiations with two trade unions failed.

"The reconciliation committee met today and it formulated subjects for discussion," said Valery Melnikov, head of one of the two trade unions involved in the pay dispute, adding that the next meeting would take place Tuesday.

Arable Land Sales Start

MOSCOW (MT) -- A federal law that allows Russian individuals and companies to buy and sell agricultural land took effect Monday.

Under the law, foreigners and companies with at least 50 percent foreign capital may lease land for up to 49 years.

However, only the Krasnodar region has passed the necessary local laws that would enable land sales to take place, said Viktor Semyonov, deputy head of the State Duma's economics committee.

Of Russia's 406 million hectares designated as agricultural land, only 190.7 million hectares, or 47 percent, are arable, according to official statistics. And most arable land, or 113 million hectares, has already been privatized.

Region Gets Racetrack?

MOSCOW (Prime-Tass) -- The building of a Formula One circuit in the Moscow region may start in late 2003 or early 2004, Moscow region Governor Boris Gromov told reporters Monday.

He added that it was his idea "to move the building of the circuit from the city of Moscow to the Moscow region."

He said that that the exact location of the circuit is now being chosen, adding that regional authorities are considering three possible locations in the Domodedovo and Podolsk districts.

In 2001, Moscow city authorities expected to build the circuit within five years. The city planned to invest $600 million in the project.

It is not yet clear whether the project will be implemented because Moscow Mayor Yury Luzhkov and Formula One chief Bernie Ecclestone failed to sign an agreement on the deal in October 2002, reportedly because of disagreements on revenue distribution.

$81M Payment to IMF

MOSCOW (MT) -- The Finance Ministry has reserved a sum equivalent to about $81 million to make its next due payment to the International Monetary Fund on Wednesday, Interfax reported Monday.

The payment will be made in three currencies: 5.333 billion yen, 121.234 million euros and $23.7 million, the ministry said.

The payment will be made exactly according to schedule and is the last of the month. Russia is due to pay a total of about $2.1 billion to the IMF in 2003.

Duma Wary on Utilities

MOSCOW (MT) -- State Duma deputies have no intention of rushing through a second reading of legislation reforming residential utilities payments, Speaker Gennady Seleznyov said Saturday.

Seleznyov was quoted by Interfax as telling miners in the city of Prokopyev in the Kemerovo region that Cabinet ministers had pressured deputies to pass a muddled piece of utilities legislation in its first reading.

"But now even the united four centrist parties understand that before the upcoming Duma elections we cannot pass a law that calls for immediate full payments of utilities," he said.

Last year, the Moscow city government experimented with asking those who could pay the unsubsidized costs of the utilities to pay in full, but only 8 percent did so, Seleznyov said.

The government has made several attempts to phase out the billions of rubles in annual federal subsidies that have kept household costs down, while the sector needs significant investment to maintain aging infrastructure.

Large sections of the public have been hostile to paying increased charges, saying they are too poor to pay in full.

Sporadic protests, sometimes by thousands of people, have broken out across the country as local authorities try to collect raised charges and, in some cases, evict those with large debts.

Flood Repairs Checked

MOSCOW (MT) -- Viktor Kazantsev, President Vladimir Putin's representative to the Southern Federal District, is inspecting the progress made in providing housing to victims of last summer's floods in the southern Krasnodar region.

Interfax reported that Kazantsev began a three-day tour of inspections Monday and that he would concentrate on areas where the restoration of homes was at its worst -- in the Novorossiisk and Krymsky districts.

Work in the Krymsky district is in full swing with 90 homes being readied for occupancy, the news agency quoted Kazantsev's press service as saying.

The floods destroyed 300 homes in the district and caused extensive water damage, the report said.

In the Novorossiisk district, many flood victims are still living in hotels, and Kazantsev has blamed the local administration for taking insufficient action, Interfax reported.

Air Force Housing

MOSCOW (MT) -- More than 5,500 families of air force officers received their own homes in 2002, Interfax quoted the head of the air force, Colonel General Vladimir Mikhailov, as saying Sunday.

"In 2002, we made 2,242 apartments ready for occupancy and issued 3,175 state residential certificates," Mikhailov said.

"That means that 5,500 families of air force officers received homes or obtained them at state expense," he said.

More than 70 percent of finances distributed to the air force for construction was spent on housing officers, he said.

Mikhailov said that this year most of the air force's revenues for construction would again be spent on housing and a similar number of families would be housed.

Housing is one of the sorest issues for Russia's professional soldiers, many of whom live in crowded conditions despite the military's obligation to provide them with homes.