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. Last Updated: 07/27/2016

Business in Brief

State Coffers Swell

NEW YORK (Reuters) -- Russia raised its 2005 budget surplus forecast above 1 percent, driven primarily by the high price of oil, which is now expected to average $26 per barrel next year, Finance Minister Alexei Kudrin said Saturday.

Kudrin, who spoke to reporters while in New York to attend a charity fund-raiser and meet with World Bank President James Wolfensohn, said overall government revenue projections for the 2004 budget were set at $100 billion and are due for revision.

The extra oil revenue is helping to quickly fill Russia's newly established stabilization fund, which must grow to at least 500 billion rubles ($17.5 billion) before anything more can be used to pay for budgetary spending increases.

Kudrin said the stabilization fund had met its goals of collecting in excess of 142.9 billion rubles through April 1.

North-South Corridor

MOSCOW (Prime-Tass) -- The North-South railway transport corridor linking Germany and Iran via Russia is expected to be launched in August, the Russian Railways Co. president Gennady Fadeyev said in a statement released Friday.

Fadeyev will travel to Iran later this week to discuss the corridor as well as Russian Railways' participation in railroad construction in Iran, the press service said.

No other details were provided.

UES Invests in Georgia

TBILISI, Georgia (Reuters) -- Russian state power monopoly Unified Energy Systems plans to spend $40 million to rebuild a Georgian power generator nearly destroyed by a gas explosion, UES's Georgia unit Telasi said Friday.

The UES investment plan comes as the new government of Mikheil Saakashvili, elected after a peaceful revolution ousted the former president of the Caucasus nation, seeks ways to stop chronic power shortages and quell chaos in the power industry.

One cause of the shortages is a lack of generating capacity, but vandalism and corruption, a source of seething popular frustration that led to last year's revolution, also played their part.

Tallinn Revamps Port

VILNIUS, Lithuania (Bloomberg) -- Estonia's Port of Tallinn, the biggest harbor operator on the Baltic Sea's eastern shore, announced a five-year project to attract more Russian oil, grain and metals for export to the West and to increase tourist visitors.

The company, whose four harbors loaded 37.6 million tons of cargo last year and serviced 5.86 million passengers, will spend 339 million euros ($419 million) to introduce new technology and upgrade facilities, seeking to increase its 15 percent share of cargo traffic in the region, it said in an e-mailed statement.

Tallinn competes for cargo business with the Primorsk port near St. Petersburg, Russia and terminals in Baltic neighbors Latvia and Lithuania.

The city also competes with Baltic Sea cruise operators in the Nordic region. Estonia is one of 10 countries that will join the European Union on May 1.

Aviation Bill Passes

MOSCOW (Bloomberg) -- The State Duma on Friday backed a bill to allow foreign investors to own bigger stakes in new aviation companies.

Deputies voted 337-64 for the bill in the first of three readings. Foreigners would be allowed to own up to 49 percent of new aviation companies, up from 25 percent at present. The head of the company must be a Russian citizen, according to the bill.

"The aim of this bill is to attract foreign investment and help our aviation companies compete on world markets," said Nikolai Gonchar, an independent deputy who introduced the bill. Companies such as Boeing, EADS and Rolls-Royce are investing or plan to invest in Russian aviation.

Surgut License Row

MOSCOW (Bloomberg) -- Surgutneftegaz, Russia's fourth- largest oil producer, will face a lawsuit from the government contesting the company's rights to tap an eastern Siberian oil field, Vedomosti said Friday, citing Natural Resources Minister Yury Trutnev.

Trutnev said the ministry plans to hold an auction for a license to tap the Talakan field and its estimated 2.3 billion barrels of oil reserves. The ministry will challenge December's decision by a court in the Sakha region that granted Surgut a license for Talakan, Vedomosti reported.

Surgut came in second at a tender for Talakan in 2001. Sakhaneftegaz, which won the tender, couldn't make a promised payment, and the results of the tender were scrapped.

Yukos, which later bought Sakhaneftegaz, had developed Talakan under a temporary license until it expired in October. Surgut received a temporary license for Talakan in October and then a permanent one in December without a tender, on the grounds that it came second at the 2001 tender.

Belgian Glass Play

MOSCOW (Bloomberg) -- Glaverbel SA, Europe's second-largest glassmaker, raised its stake in Borsky Glass Factory to 44.5 percent from 36.4 percent as it seeks to gain control of the Russian plant, Vedomosti reported Friday.

Brussels-based Glaverbel bought the stake from Alfa Capital Holdings, a unit of Alfa Bank, the newspaper said, citing Vladimir Kolodezny, Borsky's deputy general director. Glaverbel is seeking a controlling stake in Borsky, Russia's largest glassmaker, the paper cited an unidentified person close to the Belgian company as saying.

Glaverbel is building a float-glass plant in the Moscow region, which will start production in December, Vedomosti said, citing Alexander Chesnokov of the Glass Institute in Moscow. Pilkington, the world's largest maker of car windshields, is building the same type of factory in Moscow, he said.

Rosneft Caspian Plan

MOSCOW (Bloomberg) -- State-owned oil producer Rosneft is expected to start developing an oil field in Kazakhstan's part of the Caspian Sea in the middle of this year, Interfax reported, citing Russia's industry and energy minister.

Rosneft and Kazakhstan are interested in pursuing the development of the Kurmangazy field, Industry and Energy Minister Viktor Khristenko said in Astana, the Kazakh capital, on Friday, Interfax reported.

Rosneft CEO Sergei Bogdanchikov had said the company may pull out of the $10 billion oil field after Kazakhstan amended its tax laws to raise more money from oil companies.

Rosneft and another Russian state-owned company, Zarubezhneft, each hold 25 percent of Kurmangazy, which has as much as 7.3 billion barrels of oil in reserves.

German Cheese Plant

MOSCOW (Prime-Tass) -- Hochland Russland, a subsidiary of Germany's Hochland, has launched a processed cheese plant worth 35 million euros ($42.46 million) in the Ramensky District in the Moscow region, Ulrich Marschner, the company's general director, told a news conference Friday.

The plant's output is expected to total 10,000 tons in 2004, while next year it is expected to reach its production capacity of 20,000 tons.

The plant's construction started in June 2002. Hochland Russland accounts for 12.5 percent of Russia's processed cheese market in terms of volume, and about 20 percent in terms of sales.

Tele2 in St. Pete

STOCKHOLM (Bloomberg) -- Tele2 AB, Sweden's second-largest phone company, bought the remaining 14 percent of mobile-phone company Sankt-Peterburg Telecom, the company said Friday.

Tele2 in February started operating a cellular network in Nizhny Novgorod, Russia's third-largest city, to lift sales in the country.

McDonald's Expansion

MOSCOW (Prime-Tass) -- The McDonald's chain of fast-food restaurants plans to invest up to $38 million in the development of its chain in Russia this year, up from $22.5 million in 2003, Svetlana Polyakova, the director of McDonald's charity fund, said Friday.

In 2004, the company plans to open between 20 and 25 new outlets, up from 15 in 2003, with investments in each one totaling about $1.5 million.

The Russian venture, set up in 1990 and operated by McDonald's Restaurants of Canada Ltd., currently runs 111 restaurants in 31 Russian cities.

$2.5M Pizza Order

MOSCOW (Prime-Tass) -- Leading Russian restaurateur RosInter plans to spend about $2.5 million rebranding its Patio Pizza chain, the company's press service said Friday.

As of April 1, the chain has officially been called Il Patio.

A new advertising campaign is expected to account for $1.5 million of the total rebranding effort.

RosInter's sales last year rose 40 percent to more than $100 million. It operates several restaurant chains, including Rostik's, T.G.I. Friday's, American Bar & Grill, Planet Sushi and Santa Fe.