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. Last Updated: 07/27/2016

Business in Brief

Putin Invites Banks

PARIS (Prime-Tass) -- European banks are welcome to come to Russia and develop their business, President Vladimir Putin told French businessmen Wednesday.

Putin said European banks should be "more brave" when considering doing business in Russia.

He said foreign banks' involvement in the Russian banking sector "should not lead to the killing" of Russian banks and "nobody plans to block the entry of European banks to Russia."

"I am your supporter," he said. "If you need something or if you face an obstacle … we will react adequately."

But Putin also advised foreign businessmen working in Russia "to have good lawyers and study Russian laws."

The Central Bank estimates that foreign capital accounts for no more than 5 percent of Russia's banking sector.

LUKoil Help on Iraq

MOSCOW (MT) -- The Foreign Ministry is helping No. 1 oil major LUKoil resolve its conflict with Iraq over the giant West Qurna-2 oil field, Deputy Foreign Minister Andrei Denisov said, Interfax reported Wednesday.

"The issue is not closed for LUKoil," Denisov said.

Acting Iraqi Oil Minister Samir Abdulaziz al-Najem had announced Monday that relations with LUKoil were terminated.

Crude Export Gloom

LONDON (Reuters) -- Oil producers may not repeat last year's 10 percent increase in crude production if export capacity cannot be freed up, the International Energy Agency said Wednesday.

"Recent weather delays and political bottlenecks, plus three successive monthly falls in exports to December, have led some to question the ability of production to rise at all," the agency said in its monthly oil market report.

The agency estimated that Russian production would grow by 6 percent in 2003 compared with 9.5 percent in 2002, an increase of 500,000 barrels per day for the year.

There is just enough flexibility in the system to accommodate an extra 400,000 to 500,000 bpd in 2003, the agency said.

Export capacity has been stretched because of reduced shipments out of the Black Sea through the Bosphorus and the government's refusal to allow pipeline shipments in the first quarter through Latvia to the Ventspils port.

Asian Pipes on Way

MOSCOW (MT) -- Russia is keen to build big pipeline projects to boost its oil exports to Asian countries, including Japan and China, news agencies reported an Energy Ministry official as saying Wednesday.

"Our oil production will increase steadily through 2005 and 2010, while consumption in Europe won't rise much, so we'd like to export the extra barrels to other regions," said Igor Kozin, director of the Energy Ministry's pipeline department, Dow Jones newswire reported.

Russia is studying a large-scale system of trunk pipelines in the Far East that would enable supply of more than 90 million metric tons of crude per year, Kozin said at an energy symposium in Tokyo.

Feasibility studies are under way on several routes, including one from Angarsk near Lake Baikal to Nakhodka on the Sea of Japan.

Japan Eyes Siberia

MOSCOW (MT) -- Japan is in talks with the government and oil companies over the development of oil fields in eastern Siberia through financing and other means, the Kyodo news agency reported Wednesday, citing diplomatic sources.

Japanese Economy, Trade and Industry Minister Takeo Hiranuma sent a letter to Energy Minister Igor Yusufov and Economic Development and Trade Minister German Gref in December addressing financing and other means of developing the fields, the sources said.

A Japanese team led by state-run Japan National Oil Corp. hopes to start joint research in 2004 into the size of reserves, the sources said. The companies include No. 2 oil major Yukos.

Pulkovo Closing?

MOSCOW (Vedomosti) -- St. Petersburg may close Pulkovo Airport to regular flights for security reasons during the city's 300th anniversary celebrations May 29 to June 1, St. Petersburg's deputy governor, Alexander Prokhorov, said Wednesday.

The airport is expected to receive some 120 official delegations during the event, Prokhorov said.

Foreign airlines estimate the planned closure of Pulkovo would cost them $1.5 million to $2.5 million.

Trans-Russia Road

VLADIVOSTOK, Far East (Prime-Tass) -- The first uninterrupted road linking Moscow to the far eastern port of Vladivostok is expected to be completed before the end of the year, Transportation Minister Sergei Frank said Wednesday, Itar-Tass reported.

The final stretch from Chita to Khabarovsk in the Far East has yet to be completed.

The European Bank for Reconstruction and Development decided last year to loan the government $229 million to complete two key road projects, one of which is the Chita-Khabarovsk link.

Railway Bill Signed

MOSCOW (Prime-Tass) -- The Federation Council on Wednesday approved a bill on managing railway property, part of a raft of government legislation on railroad reform.

The Railways Ministry expects all legislation necessary for the railway reform to be passed by the end of May or beginning of June, Railways Minister Gennady Fadeyev said.

The bill lays down the privatization procedure for the railway system, which would lead to the establishment of a state-controlled joint-stock company called Russian Railways Co.

The privatization is to be carried out by taking assets from federal railway organizations and bringing them into the charter capital of Russian Railways.

The bill has to be signed by President Vladimir Putin to become law.

$8Bln in Metal Exports

MOSCOW (Prime-Tass) -- Ferrous metal product exports are estimated to have risen 13.3 percent year on year to $8.1 billion in 2002, according to a social and economic development report released Wednesday.

The Economic Development and Trade Ministry, which drew up the report, attributed the increase mainly to the rise in exports of higher value-added products in the second half of the year and an increase in their export prices by 6 percent to 15 percent.

Ferrous rolled stock accounted for about 70 percent of the sector's exports last year.

Investment in the ferrous metals industry fell 27.9 percent to 26.8 billion rubles ($850 million) last year.

Cash Bill Passed

MOSCOW (Prime-Tass) -- The Federation Council on Wednesday approved a bill lifting to $3,000 the amount of cash that Russian citizens and foreigners can take out of the country without filling out a declaration.

The bill also stipulates that individuals leaving Russia can take up to $10,000 with a declaration.

Russian citizens are currently permitted to take $1,500 out of the country without restrictions.

Ruble Rises on CB Shift

MOSCOW (Reuters) -- The ruble climbed to a 14-week high against the dollar Wednesday, a day after the Central Bank signaled a shift in its monetary policy from the real exchange rate to inflation rate targeting.

Economists said the move could prompt a shift to ruble assets, triggering a credit boom and also protect the Central Bank's hard currency reserves in the event of a global oil prices slump.

The ruble jumped 7.39 kopeks in official early trade to a weighted average for settlement Wednesday of 31.7101 to the dollar from 31.8840 on Tuesday, when it rose 3.74 kopeks.

Its gains came on the heels of the Central Bank's recent comments that the ruble is undervalued and its real effective rate against the basket of currencies could appreciate 4 percent to 6 percent this year, traders said.

For the Record

No. 3 cellular operator Megafon on Wednesday launched its network in Tatarstan. The company's network currently covers the cities of Kazan, Naberezniye Chelny and Nizhnekamsk, as well as the main roads in the republic. (MT)

Golden Telecom is to build a network for No. 2 cellular operator Vimpelcom in St. Petersburg. Vimpelcom is expected to open its network in the city no later than the second quarter. (MT)