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. Last Updated: 07/27/2016

Business in Brief

Nuke Sub Deal Denied

MOSCOW (AP) -- Defense Minister Sergei Ivanov denied Friday that India would lease a nuclear submarine from Russia, Russian news agencies reported.

Ivanov said he'd had far-reaching discussions on military deliveries during his January visit to India, "but there was no talk of leasing any submarines," Interfax and Itar-Tass reported.

The agencies had reported Thursday that the Indian Navy would lease an Akula-class nuclear submarine, capable of firing both nuclear and conventional missiles, for 10 years.

Sakhalin-3 Tender

MOSCOW (AP) -- The Russian government will auction the license to develop the Far East Sakhalin-3 oil fields within three months of a new law on mineral reserves coming into effect, the official newspaper Rossiiskaya Gazeta reported Friday.

Rights to explore the Sakhalin-3 fields were originally granted in 1993 to U.S. oil giants ExxonMobil, Chevron Texaco, and Russian state oil company Rosneft.

The consortium had hoped to develop the block under a production-sharing agreement but the license was never issued in the absence of a legal framework for such agreements.

Exxon has said that it would view a re-auction of the development license as a violation of its rights.

Khodorkovsky Trial

MOSCOW (Reuters) -- The fraud and tax evasion trial of Russian oil billionaire Mikhail Khodorkovsky, seen by many as politically motivated, should end early next year, one of his lawyers said Thursday.

Genrikh Padva said he expected witness testimony to end in November or December. The prosecution and defense would then begin debates, during which prosecutors are set to disclose what sentence they are seeking for the magnate, he said.

"I don't think it [the trial] will be over before January. I believe it may well happen in February next year," Padva told reporters. Khodorkovsky faces up to 10 years in prison if convicted.

Khodorkovsky pleaded not guilty in July and predicted he would soon be stripped of his firm.

Japan Auto Plant Plan

MOSCOW (Bloomberg) -- Denso Corp., the world's third-largest maker of car parts, may build a factory in Russia, following its largest shareholder Toyota Motor Corp. in setting up manufacturing in the former Soviet state, Vedomosti reported Friday.

Denso, based in central Japan's Aichi Prefecture, may build a plant in the northwestern Leningrad region, where Ford, the second-largest U.S. automaker, has set up its plant, the newspaper said, citing Denso sales director Takaaki Saito.

Toyota and Nissan Motor Co., Japan's two largest carmakers, may start production in Russia to boost their market share in what is expected to be the world's third-fastest growing car market in the next four years, company officials said last month.

Conflict Diamonds

NEW YORK (Bloomberg) -- Russia is compromising a global effort to curb the trade in so-called conflict diamonds that have funded wars in Africa by failing to provide trade statistics, the London-based pressure group Global Witness said Friday.

Under the Kimberley Process, a two-year-old global certification system to guarantee that diamonds aren't smuggled from conflict areas, governments are supposed to publish production and trade data. Russia, which is due to become chairman of the process, still considers such data a state secret, said Global Witness, which is partly funded by billionaire financier George Soros.

"Russia's non-compliance for almost two years on this key issue brings its proposed chairmanship of the Kimberley Process in 2005 into serious doubt," Global Witness activist Corinna Gilfillan said in an e-mailed statement.

While Russia has created legislation to declassify diamond data, President Vladimir Putin hasn't signed it into law, Global Witness said.

Gold Bid Complaint

MOSCOW (Bloomberg) -- Gold Fields Ltd. has complained to South Africa's stock market regulator over Harmony Gold Mining Co.'s 46.9 billion rand ($7.7 billion) takeover bid, the Securities Regulation Panel said Friday.

"If a party disagrees they are entitled to complain under the code," Richard Conellan, the Panel's executive director, said by telephone from Johannesburg, declining to comment further. He said a hearing will be held on Oct. 26 or 29.

Harmony's bid can initially be accepted by investors holding as much as 34.9 percent of Gold Fields shares by Nov. 26, just below a 35 percent level that under stock exchange rules, triggers a mandatory offer to all shareholders. The early settlement may block Gold Fields' $2.1 billion offer for Canada's Iamgold Corp. The rest of investors could accept the offer at a later date.

Norilsk Nickel, which owns 20 percent of Gold Fields, has already agreed to back Harmony's offer. It wouldn't be part of the so-called early settlement.

Kurganenergo Stake

MOSCOW (Bloomberg) -- A group of investors led by Artyom Bikov, a former adviser to Unified Energy Systems, Russia's national utility, hold close to 50 percent of Kurganenergo, which will become part of a territorial power company in a nationwide industry restructuring, Vedomosti reported Friday.

Bikov and partners spent more than 18 months and "tens of millions" of U.S. dollars to acquire the shares of Kurganenergo, a power producer and distributor in the southern Urals region of Russia, Bikov told the newspaper.

Kurganenergo power assets will be combined with those of Tyumenenergo, whose clients include oil producers TNK-BP, Yukos and Surgutneftegaz, and Chelyabinsk, which supplies power to Mechel Steel Group, the nation's fifth-largest steel producer. Bikov is a former general director of Tyumenenergo and he also ran Kurganenergo, the paper said.

LUKoil to Up Exports

MOSCOW (Reuters) -- Oil major LUKoil revised its long-term strategic plan but kept short-term output goals unchanged Friday at the first board meeting since it forged an alliance with ConocoPhillips.

LUKoil, in which Conoco agreed to buy a 10 percent stake this year, said it still saw output growth slowing next year to 4 percent from an expected 7-8 percent this year, and forecast 2005 production of 90.2 million tons (1.81 million bpd).

It said exports including supplies to LUKoil's refineries outside Russia would rise by 11 percent in 2005 to 49 million tons. LUKoil promised to reduce the number of companies in which it has stakes to 105 by 2005-2006 from a current 293 to improve business efficiency.

Severstal Output Boost

MOSCOW (Reuters) -- Russian steel major Severstal plans to increase rolled steel output to more than 9.9 million tons in 2005 from 9.25 million planned for this year, the company said Friday.

Total steel output in 2005 is expected to reach 11 million tons, Severstal said in a statement published on the company's web site

Severstal produced 6.9 million tons of rolled steel in the first nine months of 2004, while total steel output was 7.7 million tons. The statement did not provide comparisons with the same period of 2003.