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. Last Updated: 07/27/2016

Business in Brief

Economy Picks Up Speed

The economy is expanding faster than expected and will "confidently" beat the government's growth target of 6 percent for this year, Finance Minister Alexei Kudrin said.

The expansion is on a "positive, sustainable trend," Kudrin told reporters in Moscow on Thursday.

The economy will expand between 5.5 percent and 6.5 percent in each of the next three years, a projection based on oil prices staying "about the same as they are now," he said.

The pace of economic expansion slowed to 5.9 percent in the first nine months of the year, down from 6.9 percent in the same period in 2004, the Economic Development and Trade Ministry said Wednesday. (Bloomberg)

October Inflation

The consumer price index rose by 0.3 percent month on month in the first 17 days of October, after rising by the same amount in September, Central Bank Deputy Chairman Alexei Ulyukayev said on Thursday.

Price rises so far in October signify a slowdown compared to the same month in 2004, in which the CPI jumped by 1.1 percent, supporting optimism the year will end with annual inflation no higher than 11 percent, he added.

"This means that, possibly, we can catch up with last year's rate in November to December and even bring the difference to zero," Ulyukayev told the State Duma's banking committee. (Reuters)

Gref Keeps Oil Duty Steady

Russian ministries have decided against further cutting export duties on fuel oil and raising them for lighter products, which would have boosted exports of heavy fuels starting in January 2006.

A Finance Ministry official said on Thursday that a government commission headed by Economic Development and Trade Minister German Gref turned down the proposal on Wednesday.

"Gref said deeper differentiation was not needed; the idea was voted down and put off indefinitely," the official said.

Russia sets export duties every two months on the basis of price monitoring of its main crude export blend, Urals. (Reuters)

Niyazov Wants More for Gas

ASHGABAT, Turkmenistan --Turkmenistan wants to raise the price of the natural gas it sells to Russia, Turkmen President Sapurmurat Niyazov told Russian Foreign Minister Sergei Lavrov.

Niyazov said he wanted to raise the price per thousand cubic meters to $50 as of 2006, and to $60 per 1,000 cubic meters thereafter.

"We are selling gas at $44, but you are raising your export prices," Niyazov said in reference to the fact that prices on Gazprom's oil-linked export contracts to Western Europe have now breached $180 per 1,000 cubic meters. (AP)

Gazprom, Eni Deal Off

Gazprom has canceled a marketing agreement with Eni of Italy following an investigation by Italy's anti-monopoly authorities.

Eni chief executive Paolo Scaroni and his counterpart at Gazprom, Alexei Miller, agreed Thursday in Moscow to scrap the accord of May 10, the Russian company said in a statement Thursday. Eni agreed in May to cede as many as 2 billion cubic meters of gas per year to Moscow-based Gazprom.

The two executives "agreed to rework the earlier-achieved package agreements on gas and take into account new possibilities for cooperation in oil projects and in crude and oil products supplies to Europe," Gazprom said. (Bloomberg)

Cap on Gas Price Hikes

Natural gas company Gazprom can raise domestic gas rates by a maximum of 11 percent next year as the government seeks to curb inflation.

Domestic prices will rise 23 percent this year, Finance Minister Alexei Kudrin told reporters Thursday in Moscow. Gazprom should not be allowed to raise rates by more than the inflation rate, Kudrin said.

Gazprom produces about 85 percent of Russia's gas and is the only company allowed to export the fuel to Western Europe. (Bloomberg)

Gazprom Q1 Net Up 34%

Gazprom said first-quarter earnings climbed 34 percent as sales rose amid higher fuel prices.

Net income advanced to 92.4 billion rubles ($3.2 billion) from 68.9 billion rubles a year earlier, the company said Thursday in a statement posted on its web site.

Revenue rose to 339.2 billion rubles from 255.8 billion rubles in the same period, the company said. (Bloomberg)

Gazprom Loan Syndicate

Six banks arranging a $13.1 billion loan for Gazprom said on Thursday that they would invite "a select group" of banks to participate in a $2.5 billion lending syndicate on Oct. 24.

ABN Amro, Citigroup, Credit Suisse First Boston, Goldman Sachs, Dresdner Kleinwort Wasserstein and Morgan Stanley said in a statement that the banks would be offered tickets between $25 million and $125 million. (Reuters)

Mitsubishi Eyes Sakhalin

LONDON -- Mitsubishi, Japan's biggest trading company, may plan to build a petrochemicals plant on Sakhalin Island after the local Russian government asked it to review the proposal.

Mitsubishi president Yorihiko Kojima met Thursday with Sakhalin Governor Ivan Malakhov to discuss "a master plan for the use of gas" from the local fields, the administration said in a statement posted on its web site.

Exxon Mobil and Royal Dutch Shell lead two groups of investors that are tapping Sakhalin's oil and gas fields. Economic Development and Trade Minister German Gref in 2001 proposed building a petrochemicals plant that would refine gas from the projects. (Bloomberg)

Tycoons Go to U.S. Court

The former owners of Ukrainian steelmaker Kryvorizhstal have filed suit in a New York court to stop the resale of the steel mill next week, Kommersant reported Thursday.

The paper said that the U.S.-based Addox holding company, controlled by tycoons Viktor Pinchuk and Rynat Akhmetov, had sought an injunction stopping the sale on grounds it would harm U.S. investors.

The mill was renationalized this year under the new administration, and there are three registered bidders for a new auction that will take place Monday. (AP)

RusAl Output Up

RusAl, the world's No. 3 aluminium producer, said on Thursday that its output of the metal was 2.03 million tons in the first nine months of this year, 1.3 percent up from the same period of last year.

This volume included 630,325 tons of value-added casthouse products, or VAPs, including alloys, wire rod, ingots, billets, and super and extreme purity aluminium, a 12.6 percent rise year on year, a RusAl statement said. (Reuters)

Amtel Plans $1.2Bln IPO

LONDON -- Russian-Dutch tire maker Amtel Vredestein expects to float on the London Stock Exchange with a value of about $1.2 billion before the end of November, the company said on Thursday.

Amtel, which is incorporated in the Netherlands and headquartered in Moscow, said it would raise $300 million as part of the listing, with one-third of the money coming from the sale of existing shares.

"Two hundred million will be used for debt repayment and capital expenditure," a spokeswoman said. UBS, Alfa Bank, Troika and ING are all working on the listing. (Reuters)

Internet Telephony Service

Mobile phone company Yevroset has started an Internet telephony service and is in talks to launch the country's first mobile virtual network operator, it said on Thursday.

Vice president Andrei Volodin said that in August Yevroset had launched Voice over Internet Protocol, or VoIP, services and that sales amounted to 3 million rubles ($104,800) that month.

The company's president, Eldar Razroyev, said Yevroset was in talks with two of Russia's three top mobile services providers -- Mobile TeleSystems, Vimpelcom and MegaFon -- to launch the country's first mobile virtual network operator services. He did not specify which ones were involved. (Reuters)

Google Office by Year's End

Google, the world's most popular Internet search engine, plans to open an office in Russia by the end of the year, Kommersant reported Thursday, citing local market players.

Google declined to confirm the plan, but said, "We are interested in the Russian market and are studying it carefully," the newspaper reported. (MT)