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. Last Updated: 07/27/2016

Business in Brief

Voloshin to Stay at UES

MOSCOW (Reuters) -- Former political fixer and presidential chief-of-staff Alexander Voloshin will stay on as chairman of Russian power monopoly Unified Energy Systems, chief executive Anatoly Chubais said Monday.

Voloshin left the Kremlin late last year in an exit many analysts saw as punishment for his support of out-of-favor "oligarchs" and prompting speculation he may not stay on as chairman of UES since he lacked a government post.

Chubais told reporters Voloshin would work full-time as head of state-controlled UES, which has embarked on a series of reforms designed to lead to the post-2006 liberalization of Russia's power markets.

"This will be his main work," Chubais said. "We will give him an office, and he will move here permanently."

He said there was no objection to his candidacy from the government, which owns 52 percent of UES, nor from private shareholders, including powerful energy and metals consortia.

Chubais, regularly rumored to be on the way out, said he was not planning to leave the energy giant either.

"I am not going anywhere. Everything is fine," he said.

Unemployment Rises

MOSCOW (Reuters) -- Unemployment in Russia rose to 5.86 million, or 8.1 percent of the workforce, at the end of February from 5.81 million at the end of January, the State Statistics Committee said Monday.

5.8% Growth in 2005?

MOSCOW (Reuters) -- Russia's economy is expected to grow by 5.8 percent in 2005 at an average annual price for crude oil of $24 per barrel, the Itar-Tass news agency quoted Economic Development and Trade Minister German Gref as saying Monday.

"If the Cabinet approves our estimate, it will then turn into an [official] forecast after government approval in May and then would be used to draw up a budget [for 2005]," Gref was quoted as saying during a meeting with President Vladimir Putin.

Russia's 2004 budget was based on an assumption that the economy will grow 5.2 percent. The country's top economy officials have said recently they planned to revise their forecast to 5.7 percent because oil prices were higher than initially planned.

Russia's main export crude blend, Urals, was trading at $30.74 per barrel Monday compared with a 2004 annual average $22-per-barrel estimate enshrined in the budget.

LUKoil Borrows Funds

MOSCOW (Reuters) -- Oil major LUKoil will borrow $150 million for five years to fund the development of an oil field at its Siberian subsidiary, the firm said Monday.

LUKoil said in a statement that the loan had been arranged jointly by Paris-based Natexis Banques Populaires and Natexis's Moscow branch for the oil firm Ritek, in which LUKoil has a controlling stake.

Export Terminal Delay

MOSCOW (Reuters) -- LUKoil postponed the launch of its Baltic Sea crude oil and refined products export terminal to June from March, a company official said Monday.

"It looks like the first shipment from Vysotsk was rescheduled to the beginning of summer," he said without giving reasons for the delay.

LUKoil wanted to launch the first, 2.5-million ton facility at Vysotsk, 150 kilometers from St. Petersburg, in November, but then rescheduled it to the second quarter of 2004. It still wants the full 10 million tons terminal to be operational by the end of 2004.

LUKoil borrowed $225 million to finance construction of the Vysotsk terminal, which will accept tankers of up to 80,000 tons deadweight.

The firm hopes the new outlet will allow it to sidestep export capacity limits by exporting its refined products from the Nizhny Novgorod, Perm and Ukhta refineries to Western Europe and the United States.

Magadan Port Tender

MOSCOW (Bloomberg) -- The government next month will offer 25.49 percent in the Magadan Sea Trade Port, the largest cargo port in the country's Far East, Interfax reported Monday, citing unidentified company officials.

The government will accept bids until April 15 and announce the winner of the tender on April 20, the news service said. The port, based in Magadan on the Okhotsk Sea, handles 90 percent of all cargoes in the Magadan region, Interfax said.

Magadan port owes 100 million rubles ($3.5 million) to the regional government and has an agreement to restructure its debt by 2011, the news service said.

Magadan's managers own 10 percent of the port and several companies control the rest, Interfax said, without naming those.

The Magadan region accounts for about a fifth of the country's gold production. Companies that operate gold or silver mines in the region include Omolon Gold Mining Co., which is 55 percent owned by Kinross Gold Corp., Canada's third-biggest gold-mining company, and Susumanzoloto. MNPO Polimetall is exploring the world's third-largest silver deposit in the Magadan region.

Rosneft to Sell Stakes

MOSCOW (Bloomberg) -- Rosneft, the country's state-owned oil producer, plans to sell its stakes in oil fields in Colombia and Algeria, so it can focus on developing Russian projects, Interfax reported Monday, citing the company's vice president Nikolai Borisenko.

Rosneft already found a buyer for its 45 percent stake in Colombia's Suroriente field, which holds some 350 million barrels of oil in reserves, Borisenko told the news service. Petrotesting Colombia SA and Holsan Chemicals Ltd. own the rest of the project, which began producing oil in December 2002, Interfax said.

Rosneft also plans to sell its interest in Algeria's 245-South block, which it is exploring together with Russia's Stroitransgaz, Interfax said, citing Borisenko. The companies have drilled two wells at the field, Interfax said.

$600M MTS Issue

MOSCOW (Bloomberg) -- Mobile TeleSystems, Eastern Europe's largest cellular company, plans to sell about $600 million of bonds to replace maturing foreign-currency debt, said Andrei Braginsky, the company's head of investor relations on Monday.

He would not comment on the likely maturity, currency or underwriters of the securities.

MTS last sold eurobonds in October, issuing $400 million of seven-year bonds at a yield of 8.375 percent. The bonds have since gained, pushing the yield down to 7.6 percent.

The debt is rated Ba3 at Moody's Investors Service, three levels below investment grade, and B+ at Standard & Poor's, four short of investment grade.

Investors Buy VSMPO

MOSCOW (Bloomberg) -- Investors bought Monday at least 10 percent of titanium producer Verkhnaya Salda Metallurgical Production Association, also known as VSMPO, the best performer on the country's benchmark stock index over the past year, amid concern that gains for the former Soviet state's biggest stocks may be slowing.

Minority shareholders in Verkhnaya Salda, Russia-based VSMPO, the world's largest titanium producer, sold at least $74 million of stock via Troika Dialog to 56 Russian and foreign fund managers in the last two weeks of February, said Gerrit Heyns, head of global equity sales at Troika, in a telephone interview.

VSMPO in 1998 created VSMPO-Avisma Group when it bought a controlling stake in publicly traded Berezniki Titanium-Magnesium Works, known as Avisma, a titanium sponge and magnesium producer in the Western Urals.

Avisma shares, which still trade separately, have risen by 365 percent this year, on four transactions.

Reserve Limits Cut

MOSCOW (Reuters) -- The Central Bank, which has recently announced plans to cut the volume of obligatory reserve requirements for commercial banks, may continue doing so, Central Bank chairman Sergei Ignatyev said Monday.

The Central Bank said Friday it would lower the requirement to 9 percent from 10 percent on corporate ruble and foreign currency liabilities from April 1.

When asked about further plans to cut the requirement, Ignatyev told reporters, "We are going to approve a new regulation on funds for obligatory reserves, and it looks like there will be changes there when it comes in force."

He did not elaborate.

The Central Bank kept the 7 percent requirement on households' ruble accounts unchanged.