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. Last Updated: 07/27/2016

Business in Brief

Total Eyes Vankor Deal



MOSCOW (MT) -- French oil major Total said Wednesday it is hoping to reach an agreement with Rosneft by the end of the year to jointly develop the vast Vankor field in western Siberia.

"We hope that we will come to a satisfactory agreement between now and the end of the year," Total's exploration and production director Christophe de Margerie told reporters in Paris on Wednesday.

Total had initially agreed last year with London-based Anglo-Siberian to obtain a 52 percent stake in Yeniseineft, the company that owns the right to the field.

But the project was bogged down by lawsuits by several Russian firms claiming they had pre-emptive rights to the field, which contains proven and probable reserves of 880 million barrels of oil and 43 billion cubic meters of gas.

But the whole deal was put on hold after Rosneft bought Anglo-Siberian this April.

De Margerie said the arrival of Rosneft could help sort things out. "The arrival of Rosneft is good news," he said. "We have found a reliable company to speak with."

Total was aiming for a 50-50 venture, Dow Jones quoted him as saying.

A spokesman for Rosneft confirmed negotiations were ongoing, but he would not elaborate.




Kasyanov's UES Order



MOSCOW (Reuters) -- Prime Minister Mikhail Kasyanov has ordered Unified Energy Systems to reorganize major power plants into wholesale generating firms, an economy ministry official said Wednesday.

"We understand from his office that this is an established fact," said Vyacheslav Kravchenko, a senior official at the Economic Development and Trade Ministry, which is overseeing the overhaul of the national power industry. "We haven't seen the decree though … I assume nothing in it has changed."

Under UES's proposals, several dozen thermal and hydroelectric power plants are to be consolidated into 10 wholesale generating companies that will be the main suppliers on a future deregulated power market.




Far East Water Crisis



MOSCOW (MT) -- Vladivostok officials declared a state of emergency Wednesday after a financial dispute caused a sharp decrease in water supplies, Interfax reported.

The crisis occurred after local electricity utility Dalenergo, seeking to recover its debts, pulled the plug on a municipal company that supplies tap water. Water supplies in the city of 700,000 have been limited to several hours a day since Tuesday.

Television showed crowds of desperate local residents lining up at water wells in bright sunshine to fill buckets by hand. The city administration ordered delivery of water storage tanks to schools, hospitals and kindergartens.

The city is receiving 200,000 cubic meters of water a day, half of its normal supply. Dalenergo said the municipal water company owes it 122 million rubles ($4 million) and has not repaid anything for the past two months.

The city has asked prosecutors to file charges against Dalenergo.




Service Sector Soars



MOSCOW (Reuters) -- The services sector expansion in August was the highest since Moscow Narodny Bank began its survey 23 months ago, making the sector attractive for foreign investment, MNB said Wednesday.

The bank's Services Purchasing Managers' Index, which provides a single-figure of the services economy, rose to a seasonally adjusted 62.6 from 61.0 in July.

"Service sector conditions remain robust, positive not only for the economy but for potential investment opportunities within the sector," said Alex Medlock, MNB's head of wholesale banking business origination.




40 New Alfa Outlets



MOSCOW (Prime-Tass) -- Alfa Bank, the country's largest private bank, plans to expand its retail network to 40 branches in Moscow by early 2005.

Maciej Lebkowski, the bank's deputy chairman and head of its retail business, told reporters Wednesday that the branches would operate under Alfa Bank Express, a division the bank established to service individuals and small businesses.

Alfa Bank Express opened its first Moscow office in January and now has 15 branches operating in the capital, with deposits totaling some $52 million.

Lebkowski said Alfa Bank plans to switch the majority of its branches to operate under the Alfa Bank Express name, with five more branches opening this year and between 15 and 20 branches next year.

Lebkowski also said that Express branches would probably open in St. Petersburg by the end of 2004 or early 2005. He added that retail branches could eventually open in 20 cities.




Fish Catch to Double



MOSCOW (MT) -- Prime Minister Mikhail Kasyanov on Wednesday signed off on a new development plan for the fishing industry that calls for a doubling of the fish catch by 2020, Interfax reported.

Kasyanov's plan says that the annual fish and seafood catch should increase to 5.5 million tons with the entire catch being sold in Russia, while only processed fish will be exported.

The plan calls for the modernization of fishing vessels and processing facilities. Kasyanov also called for the preparation of agreements allowing Russian ships to fish in international waters.

Potentially the hottest issue -- a proposal to make fishing quotas fairer and more transparent -- will be decided by a commission comprising representatives of federal ministries, regions and fishing associations.

How the quotas will be allocated is not outlined in the plan.




Indian Blow to MiG



MOSCOW (MT) -- After a protracted tender process lasting nearly two decades, India finally decided Wednesday to purchase 66 Hawk jet trainers from Britain's BAE Systems.

The $1.3 billion deal dashed the hopes of Russian aircraft manufacturers.

The jets are needed to train India's pilots, who currently graduate to flying supersonic MiG fighter jets after flying trainer jets.

A lack of adequate training has caused the loss of at least 170 MiGs in accidents over the past decade, Reuters quoted Indian air force officials as saying.

The Hawk had been widely seen as the favorite to clinch the deal, with other bidders including Czech jet maker Vodochody, which is 35 percent owned by Boeing.

Russia's MiG-AT trainer jet had been touted as a potential answer to the Indian air force's woes.

At last month's Moscow Aviation and Space Show, Alexei Fyodorov, the president of NPK Irkut -- which has sold Su-30 MKI fighters to India -- said he was ready to back another Russian trainer jet, the Yak-130.