Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Business in Brief

Kiev Plays Union Card

MOSCOW (MT) -- Ukraine will not ratify an economic union with Russia, Belarus and Kazakhstan unless it can resolve a bitter border dispute with Moscow, the Ukrainian ambassador said Tuesday.

"It is not the right moment to ratify the treaty" signed in September, Mykola Biloblotski told reporters, according to Agence France Presse.

"We have to eliminate tensions" over the tiny island of Tuzla situated between the Black Sea and Sea of Azov, he said.

The feud between the two neighbors erupted at the end of September when officials from the southern region of Krasnodar approved the building a sea dyke to the island, which is in the middle of a key shipping route that leads to the Mediterranean via the Black Sea.

Last month, Russia said that Ukraine had agreed to withdraw the troops that it deployed to the area in exchange for a halt to construction, but Kiev has dragged its feet.

Debt Deal With Serbia

BELGRADE, Serbia-Montenegro (AP) -- Russian companies will get contracts worth $100.6 million to renew Serbia's major power plant as part of a complex settlement to clear mutual back payments, Serbian Finance and Economics Minister Bozidar Djelic said Tuesday.

Russia ran up debts to Serbia in the 1980s, when the republic was part of the former Yugoslavia. Serbia, in turn, became indebted to Russia in the 1990s, mostly by importing natural gas badly needed during U.S. sanctions.

The deal reached Tuesday included a reassessment of Russia's original debt of $490 million, now valued at 62.5 percent of the nominal value, or $306.25 million, Djelic said.

The Serbian debt to Russia is estimated to be $248 million. The deal is "a breakthrough," Djelic said.

"After months of negotiations … we have found a solution" to years of claims between Russian and Serbian companies for unpaid goods and services, Djelic said.

The deal, which provides renewal of the Djerdap hydroelectric plant in eastern Serbia, also resolved other issues harming Serbian-Russian trade relations, Djelic said without giving details.

Oil Duties to Be Cut

MOSCOW (Bloomberg) -- Russia plans to cut its crude oil export duty by 7.7 percent starting Dec. 1, as the government adjusts the tax after a decline in oil prices, Interfax reported Tuesday, citing an unidentified government official.

The oil duty will be cut to about $31.2 per metric ton ($4.26 per barrel), from $33.8 per ton ($4.61 per barrel), the news service reported.

The oil products duty will be slashed to $28.1 per ton, down from the $30.4 per ton charged now.

The new duties will be valid through January.

Russia is the world's second-largest oil supplier, after Saudi Arabia.

Pipeline Capacity Boost

MOSCOW (Bloomberg) -- Transneft, the state-run monopoly that ships most of the country's oil, plans to boost export capacity at least 11 percent next year by upgrading existing pipelines to the Baltic Sea and starting shipments to the Mediterranean.

Transneft plans to expand export pipelines by 440,000 barrels per day, up from at least 4 million bpd of oil it expects to export this year, Igor Solyarsky, a vice president at the company, said Tuesday.

Transneft plans to increase shipments through the Baltic Oil Pipeline System to the port of Primorsk by 40 percent to 840,000 barrels per day next spring, after more than doubling its capacity this year. It also plans to increase by 11 percent to 1 million bpd exports toward Poland.

Transneft will invest 35.8 billion rubles ($1.2 billion) in its pipelines and pump modernization next year.

Itera 'Not for Sale'

MOSCOW (Reuters) -- Gas trader Itera denied Tuesday that its private shareholders planned to sell the firm after a report last week that gas giant Gazprom was looking to buy the company for $500 million.

"The rumors about the sell-off of Itera are not true. The company is not for sale. We are not planning to quit the gas business," Itera's chairman and its major shareholder Igor Makarov said in a statement.

The Financial Times reported last week that the world's largest gas producer, Gazprom, was considering a bid of up to $500 million for Itera to strengthen its near-monopoly over domestic and overseas sales and distribution.

Gazprom later denied the report.

Itera said it had already invested $1.2 billion in developing gas fields in western Siberia and its business relations with Gazprom were not going beyond partnership in certain projects and areas.

Itera became a huge gas trading firm in the mid-1990s under the previous management of Gazprom, when it was selling up to 80 billion cubic meters of both its own and Gazprom's gas to clients in Russia and the former Soviet republics.

Its business has shrunk three-fold since Gazprom's new management team, headed by ally of President Vladimir Putin Alexei Miller, started to recoup assets and contracts from Itera from May 2001.

Cost of BP Project Soars

MOSCOW (Bloomberg) ---- A BP-led project to sell natural gas to China and South Korea raised the estimated cost of a pipeline to transport the fuel by one-third to about $15 billion, a person familiar with the project said.

A preliminary study in 1995 put the cost of the pipeline at $11 billion, the source said, asking not to be identified and declining to say why the estimate had increased. The feasibility study will be completed on Nov. 14, according to the South Korean Ministry of Commerce, Industry and Energy.

The proposed pipeline would tap natural gas from fields near Lake Baikal in eastern Siberia and skirt Mongolia, running via Harbin in northeastern China to South Korea via the Yellow Sea. The project would send 20 billion cubic meters per year of gas to China and 10 bcm to South Korea.

Credit Suisse Opens

ZURICH, Switzerland (Reuters) -- Credit Suisse has opened a representative office in Moscow to expand client services to Russia, the Swiss banking group said Tuesday.

The office will act as a point of contact for international investors and will offer information about services and products available in Switzerland but it is not authorized to operate as a bank under Russian law.

"Russia offers considerable wealth-creation opportunities as a result of its dynamic economic development," Credit Suisse management committee member Joachim Straehle said in a statement.

"We regard the strengthening of our presence in Russia as a key element of our East European strategy," he added.