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. Last Updated: 07/27/2016

Business in Brief

First Iraq Oil Contracts

LONDON (Reuters) -- Iraq has signed its first post-Saddam Hussein long-term crude oil sales contracts with Western multinationals and sees exports rising by 43 percent in August, a senior source in Iraq's State Oil Marketing Organization said Wednesday.

ChevronTexaco, ConocoPhillips, BP and Shell signed contracts running from Aug. 1 through Dec. 31, 2003, on Tuesday and negotiations are continuing with other companies, he said.

Sibneft in Kuwait?

MOSCOW (MT) -- U.S. oil company ChevronTexaco said Wednesday it submitted a proposal to the state-owned Kuwait Petroleum Corp. for a five-member consortium to help with country's efforts to double production from its northern oil fields, Dow Jones reported.

The consortium includes ChevronTexaco, France's Total, Petro-Canada, China's Sinopec and Sibneft.

A spokesman for ChevronTexaco in London declined to give Dow Jones any further details on the group, formed to bid for Project Kuwait, a government-backed scheme to bring in international oil companies to double to 900,000 barrels per day the oil producing capacity of the country's northern oil fields.

The call is a rare opportunity for foreign oil companies to gain a foothold in one of the Middle East's richest oil-producing nations.

Norilsk Stillwater Stake

MOSCOW (Reuters) -- Norilsk Nickel said Wednesday it had opened a tender to buy an additional 5 percent of shares in Stillwater Mining Co., the sole U.S. producer of platinum and palladium.

Norilsk, the world's biggest nickel producer, last month bought 51 percent of Stillwater. It proposes to buy up to 4,350,000 shares from minority shareholders at $7.50 each to increase its stake to 56 percent.

The offer price is at a stiff premium to Stillwater's closing price of $5.03 on Tuesday. Norilsk paid $100 million in cash and about 877,000 ounces of palladium for the 51 percent stake.

U.S. Power in Georgia

MOSCOW (Bloomberg) -- AES Corp., a U.S. power producer that sells electricity in more than 30 countries, may sell its power assets in Georgia, Vedomosti reported, citing AES official John Huffaker.

The company is negotiating with national power provider Unified Energy Systems and Badri Patarkatsishvili, a former partner of businessman Boris Berezovsky, the paper said. Georgian officials do not want UES to get the assets, the paper said.

AES owns 75 percent of AES-Telasi, a power seller in the Georgian capital Tblisi; two generators at the capital's thermal power station; and two hydroelectric stations, the paper said.

MTS Buys Sibchallenge

MOSCOW (MT) -- The nation's top mobile phone operator Mobile TeleSystems will buy Krasnoyarsk-based regional operator Sibchallenge for $56 million, Kommersant reported Wednesday.

Sibchallenge has 130,000 subscribers in the northwest Siberian region and reported revenues of $10.5 million for the first quarter.

MTS rival Vimpelcom also intended to buy Sibchallenge but apparently changed its mind, the paper said without elaborating.

Gazprom Eyes Korea

SEOUL, South Korea (Bloomberg) -- Gazprom wants to buy a stake in state-run Korea Gas Corp. to expand its business in Asia, Maeil Business Newspaper reported, citing Gazprom's deputy chief executive officer.

Gazprom will make a bid once the South Korean government provides details about how Korea Gas will be sold, the paper quoted Alexander Ananenkov, who was in Seoul on Wednesday, as saying.

The proposed sale of state-held shares of Korea Gas, the world's biggest buyer of liquefied natural gas, and Korea Electric Power Corp. is behind schedule after South Korean President Roh Moo Hyun, who took office in February, called for a re-evaluation of the government's privatization plans.

Companies such as Royal Dutch/Shell Group, the world's second- largest publicly traded oil company, have said they want a stake in Korea Gas.

Grabbing Uzbek Gas

MOSCOW (Bloomberg) -- Gazprom, the world's top natural gas producer, plans to start exploration of gas fields in Uzbekistan, buy gas for marketing in Russia and Europe and build new pipelines to ship gas from Turkmenistan.

Gazprom and Uzbekneftegaz, Uzbekistan's state-owned extraction company, on Tuesday agreed to explore the country's fields and produce 2.5 billion cubic meters of gas in the Ustyurt region next year, the company said in a statement e-mailed to news services. The output may double in the future.

"Gazprom plans to invest in modernization of gas pipelines" linking the Central Asian states with Russia," the statement said. It is "considering taking shares in the new and upgraded pipeline infrastructure."

Gazprom, which operates half of the world's trunk gas pipelines and supplies about 40 percent of Western Europe's imports of gas, needs additional gas to meet its export contracts.

Uzbekistan holds an estimated 6.25 trillion cubic meters of gas reserves, enough to supply the world for more than two years.

Rosneft Refinancing

MOSCOW (Bloomberg) -- State-owned oil producer Rosneft has borrowed $500 million from ABN Amro Holding NV, the biggest Dutch bank, to refinance its debt.

The company borrowed the money for 4 1/2 years at the London interbank offer rate plus 3.55 percent, Rosneft spokesman Vladimir Voyevoda said. The loan is guaranteed by the company's main subsidiary, Rosneft-Purneftegaz, he said.

3 New Iced Teas

MOSCOW (MT) -- Unilever PLC and top dairy and juice group Wimm-Bill-Dann said separately Tuesday they had started producing iced tea in the Moscow region, Vedomosti reported Wednesday.

Unilever placed an order with Pepsi Bottling Group to produce Lipton Iced Tea, while Wimm-Bill-Dann launched Nice Tea, a new brand.

A medium-sized Russian drink company, Lebedyansky, produces iced tea under the label Frustyle.

Eldorado's 2nd Life

MOSCOW (MT) -- The elite Eldorado food store on Bolshaya Polyanka Ulitsa, with its prominent neon butterfly sign, will be reborn as a clothing store on Aug. 10.

Launched in 1994, Eldorado was one of Moscow's first food shops aimed at wealthy Muscovites, a clientele for whom it flew in elite alcohol brands and fresh oysters.

The Eldorado store is closed for renovation, but restaurant La Gourmet next door is still open for business. Both establishments are owned by businessman Vyacheslav Semenduyev, Vedomosti reported.

According to managers of other stores, the average shopping basket at Eldorado clocked in at $120 even in 1999, the year after the crisis when most upmarket stores suffered. The average bill at Moscow's supermarkets today is $6 to $8.

Yussi Tuisku, director of Kalinka-Stockmann, which was considered Eldorado's main competitor, said Semenduyev was closing up shop too soon. "There are plenty of people who will never go to Auchan or Metro. They need quality goods and service and not the low prices of these chains."

(Non) Baltika in Iran

MOSCOW (Bloomberg) -- Baltika Brewery, the country's largest beer maker, will begin selling nonalcoholic beer in the Muslim state of Iran this month as the company seeks to boost exports to help offset slowing sales growth at home, AK&M reported.

Baltika, a St. Petersburg-based joint venture between Scottish & Newcastle PLC and Carlsberg Breweries AS, plans to sell 3 million liters of nonalcoholic beer to Iran in 2004, or about 1.7 percent of total output, giving it a fifth of the Iranian market, the agency said, citing a statement from the company.

The beverage will retail for $3 to $4 per bottle in Iran compared with about 70 cents in Russia, the agency said.

Growth in Russia's beer market is slowing for the second year as more international brewers vie for share. The market will grow about 4 percent this year, according to a report issued this week by Moscow-based Renaissance Capital. That is about half the pace estimated by analysts earlier this year and down from 20 percent growth in 2001 and a 12 percent gain in 2002.

Baltika may see its market share in Russia fall this year to 21 percent from 24 percent, according to RenCap.