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. Last Updated: 07/27/2016

Business in Brief

$85M Tax Challenge

MOSCOW (Bloomberg) -- Tyumen Oil Co., the largest unit of BP's Russian venture, is challenging a 2001 tax audit that stated the company owes 2.4 billion rubles ($85 million) in back taxes.

The Moscow Arbitration Court will probably hear a suit in February, after agreeing to take the case this month, TNK-BP said. TNK-BP, in which BP owns 50 percent, declined to comment on whether any fines or penalties had been assessed on the tax claim.

Tax authorities claim Tyumen obtained tax benefits offered to movie producers, Interfax reported Wednesday. TNK-BP declined to comment on the report.

LUKoil License Trouble

MOSCOW (Bloomberg) -- LUKoil has three months to amend license agreements for six oil fields, with estimated 115.6 million barrels of crude, where it delayed development works, the Natural Resources Ministry said Wednesday.

The ministry's licensing commission said LUKoil is behind an agreed schedule for exploratory drilling and for preparation of development plans for the fields, situated in western Siberia's Khanty-Mansiisk region, the ministry said in a statement.

The ministry may cancel licenses for the fields, currently held by the company's LUKoil-Zapadnaya Sibir unit, in three months, the commission's chairman Anatoly Temkin said in the statement.

Oil Transport Up 27%

MOSCOW (Bloomberg) -- Primorsk Sea Shipping, Russia's No. 3 shipper by tanker capacity, said transport of crude and oil products rose 27 percent last year to a record as Pacific-based oil companies increased production.

Fuel shipments rose to 13.7 million tons last year up from 10.8 million tons in 2003, the Nakhodka-based company said in a statement posted on its web site. Most shipments were between non-Russian ports.

The company raised by 47 percent, to 2.1 million tons (42,000 barrels per day), shipments of oil produced on Sakhalin Island by Rosneft-Sakhalinmorneftegaz, a unit of state-owned Rosneft and Royal Dutch/Shell Group-led venture, Primorsk said in the statement.

Samara Sells Oil Fields

MOSCOW (Bloomberg) -- Seven oil fields in Samara were sold at auction for 2.3 million rubles ($81 million), more than 10 times the start price, Vedomosti reported, citing an official from the Natural Resources Ministry.

Samara-Nafta, in which former Yukos chief executive Simon Kukes owns a minority stake, won one license for 501 million rubles, Vedomosti reported Wednesday.

Tatneft won the rights to two fields, and Austrian Hares Group, which owns three Ukrainian oil fields, won one license, Vedomosti said. Local companies won the other three licenses, the paper reported. The seven fields have combined reserves of 44 million tons of oil (323 million barrels), Vedomosti said.

Gazprom Hikes Prices

MOSCOW (Bloomberg) --Gazprom increased the price of natural gas shipped to Azerbaijan by 15 percent, the web news service Day.Az reported Wednesday.

The price was raised to $60 per 1,000 cubic meters this year, up from $52 for the same volume last year, the news service said. Azerbaijan plans to raise gas imports 10 percent to 5.5 billion cubic meters this year, the news service reported.

Novolipetsk Up 4%

YEKATERINBURG (Reuters) -- No. 3 steel firm Novolipetsk raised rolled steel production by 4 percent last year to 8.6 million tons as the sector continued to boom on strong global prices for the commodity.

Novolipetsk -- controlled by Vladimir Lisin, one of Russia's richest and most influential industrialists - said in a statement sales were 126 billion rubles ($4.5 billion) -- up 70 percent from 2003.

"Exports were 7 million tons, or 73 percent of total production," it said. Overall steel production rose 3 percent to 9.1 million tons.

Novolipetsk, like many other Russian producers, has taken advantage of high global steel prices, driven by demand in China, to expand output and modernize its plants.

SUAL Output Rises

MOSCOW (Bloomberg) -- SUAL Group, Russia's No. 2 aluminum producer, increased output of the metal 3.8 percent last year to 923,800 tons after adding two production lines.

Production of alumina, an intermediate product, rose 1.3 percent to 2.07 million tons, SUAL said in a statement Wednesday. Bauxite-ore output jumped 13 percent to 5.02 million tons as the company developed its Middle Timan mine in the Komi republic.

SUAL produces two-thirds of Russia's bauxite and trails only Russian Aluminum in primary metal. Sual is seeking financing for a $2.1 billion project in the Komi republic to almost double bauxite output to 9.93 million tons per year by 2010.

$200M Alrosa Bond

MOSCOW (Bloomberg) -- Alrosa, which mines a quarter of the world's rough diamonds, plans to sell $200 million of eurobonds, Interfax reported, citing an unidentified banking official.

J.P. Morgan Securities, a unit of J.P. Morgan Chase & Co., the second-biggest U.S. bank, and ING Bank London, a unit of ING Groep, the biggest Dutch financial-services company, will manage the sale, the official told Interfax.

Alrosa in November sold $300 million of bonds maturing Nov. 17, 2014, with a coupon of 8.88 percent. The company's $200 million of new bonds will have the same maturity, Interfax said.

$150M Alfa Bank Bond

LONDON (Reuters) -- The country's top private bank, Alfa Bank, plans to come to the market late this week or early next week with a $150 million eurobond with a two- to three-year maturity, a market source said Wednesday.

Alfa Bank is expected to hold a marketing roadshow in London on Friday with the sale expected soon thereafter.

Alfa is in the process of issuing $400 million worth of European Medium-Term notes. In September the firm sold $175 million worth of notes at 8.38 percent.

Lead managers of the latest deal are Merrill Lynch and UBS.

Aeroflot Cuts Flights

MOSCOW (Reuters) -- Flag carrier Aeroflot said Wednesday it was cutting the number of flights to Thailand because of a dwindling tourist flow to the Asian country hit by last month's tsunami disaster.

Thailand is a favorite holiday destination for many Russians.

Aeroflot said it had decided to unite its Friday and Sunday flights and cancel Monday flights altogether.