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. Last Updated: 07/27/2016

Business in Brief

Fradkov Defends Putin

MOSCOW (AP) -- Prime Minister Mikhail Fradkov said Thursday there would be no return to a Soviet-style, government-controlled economy, amid fears that President Vladimir Putin's Kremlin is moving to recapture key chunks of the nation's industry.

Speaking at a government meeting on enterprise and competition, Fradkov insisted that the clocks would not be turned back.

"Some may get the erroneous impression of a return to neo-state policy of the old format," he said, Interfax reported. "This will not happen."

Reserves Fall

MOSCOW (Reuters) -- Russia's gold and foreign exchange reserves fell to $120.1 billion on Jan. 14 from $124.6 billion on Jan. 7, the Central Bank said Thursday.

Crude Duties Cut

MOSCOW (Reuters) -- Russian crude oil export duty will fall to $83 per ton from Feb. 1, according to an announcement in the government gazette Thursday.

The Economic Development and Trade Ministry said last month the duty was likely to fall to around $83 following a drop in international oil prices, but said the issue would be reviewed further in January.

The current oil export duty, reviewed every two months on the basis of prices for Russia's mainstay Urals crude, is set at $101 per ton.

Energy Summit Plan

BERLIN (Reuters) -- A bilateral energy summit proposed by Germany to secure its oil and gas supply from Russia will take place this October, the German government confirmed Thursday.

Alongside Economy Minister Wolfgang Clement, representatives from leading German energy utilities would also attend, an Economy Ministry spokeswoman said in Berlin, referring to companies such as E.ON and RWE.

Although discussions would focus on shoring up Russia's oil and gas provision to Germany, there would also be related talks on investment in transport and new technology.

Russia's Own Guinness

DUBLIN (Bloomberg) -- Heineken, the world's No. 3 beermaker, will brew Guinness stout in St. Petersburg under an agreement with Diageo, the owner of the 246-year-old Irish brand.

Heineken will be the first beermaker to brew the stout in Russia when production starts in the middle of this year, the companies said Thursday. The Dutch company also will be Diageo's importer and distributor of Guinness and Kilkenny beers in Russia starting July 1.

Heineken aims to boost its share of the domestic beer market from 8.6 percent with partnerships and acquisitions.

IFC Funds Novatek

MOSCOW (Reuters) -- The International Financial Corp., or IFC, has approved a $50 million credit to Russian gas producer Novatek and an investment of up to $35 million in the firm, an IFC spokeswoman said Thursday.

Novatek is Russia's largest independent gas producer, with reserves of 1.5 trillion cubic meters of gas and 950 million barrels of oil. It is controlled by a group of private investors led by businessman Leonid Mikhelson, but relies heavily on gas monopoly Gazprom.

A Novatek spokesman said the firm had been in talks with the IFC about the sale of a 1 percent stake in Novatek.

Rosneft Funds Rosneft

MOSCOW (Bloomberg) -- State-owned Rosneft will borrow 3.33 billion rubles ($118 million) for one year at no interest from a Stavropol subsidiary, Vedomosti said Thursday, citing a statement from the unit.

The subsidiary, Rosneft-Stavropolneftegaz, will raise the money to lend to Rosneft by selling 1-year promissory notes paying 2.5 percent interest, Vedomosti reported. Rosneft said in December it bought Yukos' main production unit, Yuganskneftegaz, along with the company that had won the unit at a Dec. 19 government-run auction, for $9.3 billion.

Benchmark Bond

MOSCOW (Reuters) -- Sberbank, Russia's largest bank, said Thursday it planned to issue a 10-year eurobond and had appointed UBS as the sole bookrunner and lead manager.

Sberbank said the offering would be of subordinated fixed rate Regulation S eurobonds and would finance a subordinated loan. The issue will be of benchmark size, which usually means at least $500 million.

"The deal will be structured as a 10-year eurobond with a non-call period of five years and a coupon step-up thereafter," Sberbank announced.

Polimetall Gold Rush

MOSCOW (Reuters) -- Russia's Polimetall raised gold production by 56 percent to 6.6 tons last year and silver output by 47 percent to 537 tons, it said Thursday, as it expands on the back of high global precious metals prices.

Polimetall, Russia's No. 1 silver company and one of the country's biggest gold companies, controls a vast network of precious metals deposits stretching from the Urals mountains to the Pacific.

Less Turkmen Gas

ASHGABAT, Turkmenistan (Reuters) -- Gas output by Turkmenistan, Central Asia's largest natural gas producer, fell to 58.5 billion cubic meters, or bcm, last year from 59.1 bcm in 2003, a government official said Thursday.

Exports fell to 42 bcm from 43.4 bcm in 2003, he said.

Yevraz Production Falls

MOSCOW (Bloomberg) -- Yevrazholding Group, Russia's largest steelmaker, said production at its mills fell last year from 2003 because of maintenance in the first half.

Yevraz's three mills in Siberia produce steel used in buildings and account for about a fifth of Russian steel output.

Crude steel output fell 0.7 percent to 13.69 million tons in 2004, Moscow-based Yevraz said in an e-mailed statement. Rolled-steel output dropped 1.2 percent to 12.23 million tons and pig iron fell 2.6 percent to 11.56 million tons.

Oil Port Closed

ST. PETERSBURG (Reuters) -- The Russian White Sea port of Vitino has stopped loading oil because of border control problems and uncertain supply, port officials said on Thursday, though shipments could restart soon.

"Since New Year there have been no loadings, and hardly any in December. The last tanker left on Dec. 17," the port's general director Vladimir Chutchenko said.

Vitino's location in the White Sea, icebound for much of the year, means a long trip round the massive Kola Peninsula. Ports on the Baltic or Barents Seas give easier access to European markets, as does Russia's pipeline network.