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. Last Updated: 07/27/2016

Business in Brief

Oil Exports Forecast

MOSCOW (Bloomberg) -- Russia will increase oil exports by about 15 percent next year, Transneft chief executive Semyon Vainshtok said Wednesday.

Exports will rise to about 240 million tons from 208 million tons in 2003, Vainshtok said at a briefing. The figures include exports to the CIS, as well transit shipments for other countries.

Production should rise to about 420 million tons of oil next year, from an estimated 412 million tons in 2003, he said, basing his figure on information from oil companies.

Transneft expects to report consolidated net income of 20 billion rubles ($672 million) this year, on revenue of 110 billion rubles, Vainshtok said. The figures are based on Russian accounting standards.

NIKoil Bank Gloom

MOSCOW (Reuters) -- The NIKoil investment bank said Wednesday a gloomy market situation has forced it to postpone a debut $100 million eurobond, a clear reference to investor concerns over the arrest of key Yukos shareholder Mikhail Khodorkovsky.

"Unpleasant events have taken place, to which the market has reacted in an adequately unpleasant manner. We and our agents believe that it will not be advantageous to issue the eurobond now," said Nikolai Tsvetkov, president of NIKoil financial corporation, of which the bank is part.

"We will postpone the eurobond, most probably until the first quarter of 2004."

Dollar 69% of Reserves

MOSCOW (Reuters) -- The dollar accounted for 69 percent of the Central Bank's foreign exchange and hard currency reserves in October, First Deputy Central Bank Chairman Oleg Vyugin said Wednesday.

The remainder is represented by the euro and gold. There are also small amounts of the pound and other currencies.

As of Nov. 1, the Central Bank's reserves amounted to $64.93 billion, including gold worth $3.74 billion.

Private Pipelines

MOSCOW (Bloomberg) -- Russia should permit the construction of private oil and gas pipelines, Interfax reported Wednesday, citing Andrei Illarionov, economic adviser to President Vladimir Putin.

The government should allow investors to build new pipelines but should not sell the existing ones, Illarionov said at a press conference in Moscow, Interfax reported.

Transneft, the state-run pipeline monopoly, ships most of the country's oil. Gazprom, the world's largest natural gas producer, controls the country's gas pipelines.

The government should also allow construction of private roads, seaports and airports, Illarionov said, according to the news service.

Oil Product Duty Caps

MOSCOW (Reuters) -- The Federation Council approved Wednesday new measures enabling the government to tightly control fuel oil and gas oil exports by imposing prohibitive duties when necessary.

The council, the upper house of parliament, endorsed last week's decision by the lower house, the State Duma, to remove all limits on export tariffs for oil products by amending a law which fixed them at 90 percent of export duties on crude oil.

Traders have said it would allow the government to slap a prohibitive duty on fuel oil exports as early as January to help the Kremlin ensure stable heating for households during the winter ahead of next March's presidential election.

The move came less than a week after President Vladimir Putin criticized current legislation adopted earlier this year after months of lobbying by embattled oil major Yukos.

The amendments have yet to be signed by Putin and be published by the official government newspaper. They will come into force one month after the official publication.

IMF Debt Paid Early?

MOSCOW (AP) -- The government is considering paying off its debt to the International Monetary Fund early, a top economic official said Wednesday.

The state may pay the $5.6 billion it owed the IMF as of Jan. 1 before or during 2006, said First Deputy Finance Minister Alexei Ulyukayev.

"We definitely intend to pay off the IMF debt before it comes due in 2008," Ulyukayev told a conference. "After that, Russia wants to play a bigger role in the organization as a shareholder, not a debtor."

The Finance Ministry estimates that the country's foreign debt will total $119 billion dollars, or 27.5 percent of gross domestic product, by the end of 2003, compared to $122 billion, or 35 percent of GDP, at the beginning of the year.

In 2000, the state owed $158 billion, which at the time comprised more than 90 percent of GDP.

Ruble Could Float

MOSCOW (MT) -- The Central Bank said it would consider floating the ruble, in an apparent reversal from last week.

"In the next few years, it will become necessary to switch to a floating exchange mechanism and to a more objective valuation of the ruble," First Deputy Chairman Oleg Vyugin said Wednesday, Interfax reported.

Just last week, the Central Bank rejected calls from the International Monetary Fund for a flexible exchange rate policy, which would most likely lead to the ruble's appreciation due to high oil prices.

Vyugin's latest statement "was very vague and nonbinding," said Vladimir Tikhomirov, senior economist at NIKoil. Floating the rate is unlikely in the near future, he said, due to economic and political constraints.

The Central Bank follows a "managed floating rate" policy, intervening in capital markets to contain real ruble appreciation or sharp swings in the exchange rate.

U.S. Gallup Barred

MOSCOW (MT) --The Moscow Arbitration Court ruled in favor of TNS Group on Monday in the legal struggle over the use of Gallup brand in Russia.

The decision effectively means that the U.S.-based Gallup Organization cannot enter the Russian market under its brand name.

The two Gallup polling agencies presently operating here are not affiliated with the Gallup Organization.

In 1991 Suomen Gallup Oy, which held the right for the Gallup brand in Finland only, registered with Rospatent and established Gallup Media and Gallup AdFact companies, which joined U.K.-based TNS Group in 2001.

Founded in Princeton, New Jersey, in 1935, the Gallup Organization is one of the world's leading polling agencies. It has subsidiary offices in 26 countries.

In 2000, Rospatent tried to revoke Suomen Gallup's registration, but this decision was successfully contested twice in court.

In August 2003, the Federal Arbitration Court invalidated these rulings and sent the case back to a lower court.

The Gallup Organization said it will appeal the Moscow court's decision.

Tour License Overhaul

MOSCOW (MT) -- The government wants to replace the current system of licensing for tourist companies with a system of accreditation, a top government official said Wednesday.

"We are suggesting the creation of another mechanism ... active in civilized countries," deputy prime minister Boris Alyoshin was quoted by Interfax.

Alyoshin said that criteria such as financial liability should be made a priority in accreditation of a tour operator.

"So far we do not have insurance funds, there is no provision for a 100 percent reimbursement to the client on demand, and conditions for interaction between tourist organizations are not worked out," he said.

Alyoshin said that if passed, the new regulations will take effect from Jan. 1, 2005.

Severstal Goes West

MOSCOW (Reuters) -- The markets watchdog said Wednesday it had allowed one of the country's biggest steelmakers, Severstal, to issue Western proxies on its local shares for up to 20 percent of its charter capital.

Severstal said in July it planned to issue Global Depository Receipts in a private placement in London this year covering 12 to 15 percent of the company's existing 22,074,192 shares.

The Federal Security Commission said Wednesday it had allowed the firm to issue GDRs on 4,414,836 shares, or 20 percent of their total number.

The firm has said some 84 percent of Severstal belonged to companies close to Severstal head Alexei Mordashov. About 8 percent are in free float and the remainder belong to the management.

"The last hindrance has thus been removed and the program could be launched as early as December," said the Troika Dialog brokerage in a research note.