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. Last Updated: 07/27/2016

Business in Brief

S&P: Too Soon

LONDON (Reuters) -- Russia needs to carry out more economic reforms before it can be awarded an investment grade rating, international ratings agency Standard and Poor's said Friday.

Rival agency Moody's Investors Service upgraded Russia two notches to Baa3, its lowest investment grade rating, earlier last week.

S&P rated Russia BB+ in December 2002 with stable outlook, one notch below investment grade.

Russia still needs to reform its institutions and economy so that it is not so dependent on high oil and gas prices, S&P analyst Konrad Reuss said.

Ukraine Pipe Flow

KIEV (AP) -- Ukraine's state-owned pipeline company on Friday pressed the government to accept an offer of Russian oil that could generate millions in revenue but would require reversing the long-idle Odessa-Brody pipeline's intended flow.

In a letter, Ukrtransnafta chairman Serhiy Vasylenko claimed the cash-strapped company would lose $37 million in revenue this year if the Cabinet sticks to its Jan. 15 deadline for deciding whether to accept an offer from Russian-British giant TNK-BP to supply low-grade Urals crude for transit to Europe. Vasylenko estimated the total cost of prolonged idling of the pipeline, completed in 2001, at some $200 million.

Last week, Ukrtransnafta approved TNK-BP's offer to supply some 450,000 metric tons of oil needed to start up the pipeline and operate it from Brody to Odessa, but the Cabinet must approve the deal.

Gas in Both Currencies

ST. PETERSBURG (Reuters) -- The export arm of Gazprom, Gazexport, said Friday that the company had no intention of pricing all its exports in euros.

"We have no special plan to move to euros," Alexander Medvedev, director-general of Gazexport, told reporters in St. Petersburg.

"We have contracts both in euros and dollars … and we have no problems with currency risk because of that."

Earlier last week President Vladimir Putin said he did not rule out that Russia could switch to pricing oil in euros.

Gazprom's gas export prices are cross-indexed with oil and refined products prices, but are adjusted with a lag of six to nine months.

Transneft on Ventspils

RIGA, Latvia (Reuters) -- Transneft wants "no relations" with Latvian oil port Ventspils, once the main northern outlet for Russian crude, the Russian pipeline monopoly's deputy president Sergei Grigoryev said Friday.

"I would like to say this loud and clear -- we are not interested in undertaking any relations with Ventspils," he said in a letter published in Latvian newspaper Dienas Bizness.

Ventspils has been starved of pipeline crude since the beginning of the year as Transneft cut exports to the ice-free port to zero from about 350,000 barrels per day.

The Latvian port now barely manages to make a small profit on Russian rail shipments of oil and oil products, averaging just above 240,000 bpd in the first nine months of 2003.

Eurobonds Suit

NIZHNY NOVGOROD (Prime-Tass) -- The government of Russia's Nizhny Novgorod region has filed suit to recover the $2.3 million overdue debt from the Nizhny Novgorod Leasing Co., a sub-borrower of the region's eurobond debt, an official with the regional court said Friday.

The hearing date was not announced.

The funds were provided to the company in Jan. 1998 for a leasing project and were never returned, the regional Finance Ministry's press service said.

The official said that the ministry has not yet decided to take legal action against the Nizhny Novgorod mayor's office, which owes $33.7 million, including $10.8 million in overdue debt.

The city government of Arzamas has a debt of $2 million, while Russia's second-largest car producer, GAZ, is another sub-borrower, with a debt of $7.8 million.

It is not clear yet whether the regional government would sue the Arzamas government or GAZ.

SUAL Strike Ends

MOSCOW (Reuters) -- Workers at a bauxite mine in the Ural Mountains owned by Russia's second-biggest aluminum producer, SUAL, have ended their underground protest after days of demanding higher pay, the company said Friday.

SUAL said the strike by up to 6,000 workers above and below ground, which started Oct. 1, had no impact on production at the company's main bauxite supplier.

"Production resumed today. From now on, managers and miners will work to restore the output lost as a result of the stoppage. The strike will not affect SUAL's overall activities," the company said.

It added the strike was illegal since trade unions had not informed the management of their plans to go on strike.

For the Record

Russia's talks on accession to the World Trade Organization have not reached a dead end and a "compromise could still be found," Prime Minister Mikhail Kasyanov said Friday. (Prime-Tass)

The government has postponed the sale of a state stake in the Magnitogorsk Iron and Steel Works until next year, a source at the Property Ministry said Thursday. (Reuters)

The Railways Ministry has transferred its 100 percent stake in Transtelecom to the state-controlled Russian Railways Co., the ministry said Thursday. (Prime-Tass)