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. Last Updated: 07/27/2016

Business in Brief

Reserves Rise to Record

Foreign currency and gold reserves rose to record $162.9 billion, increasing for a seventh straight week, the longest consecutive gain so far this year. The reserves climbed by $3.3 billion in the week to Oct. 7, the Central Bank said Thursday in a statement.

The previous record level for reserves was $159.6 billion, as of Sept. 30. The bank held 60 percent of the reserves in dollars, 33 percent in euros and 7 percent in British pounds, Central Bank First Deputy Chairman Alexei Ulyukayev said Thursday. (Bloomberg)

2005 Inflation Target

LONDON -- Russia's 2005 inflation target is still achievable despite rising price pressures but the firming ruble remains a concern, Deputy Finance Minister Sergei Shatalov said on Thursday.

"As before, we hope to contain inflation within the 11 percent limit we aimed for," Shatalov said on the sidelines of a conference. (Reuters)

Fradkov OKs Sibneft Buy

Prime Minister Mikhail Fradkov's government has approved the state-controlled gas monopoly Gazprom's purchase of the Sibneft oil company, a deal that will give the state control over one-third of Russia's oil output.

The government press service said Thursday that the government on Wednesday had approved a draft directive instructing its representatives on the Gazprom board to vote in favor of the purchase, announced Sept. 28. That opens the way for the Gazprom board to approve the deal by a vote in coming days. (AP)

Gazprom's Eni Deal

MILAN, Italy -- Oil company Eni is awaiting approval from the country's antitrust authority for an accord giving Gazprom direct access to consumers in Italy, Eni chief executive Paolo Scaroni said.

Scaroni said the agreement would benefit Eni because it extended the Italian company's own supply contracts with Gazprom by 10 years to 2027 for 20.5 billion cubic meters per year. (Bloomberg)

Gazprom Oil in 2007

LONDON -- Natural gas producer Gazprom plans to start pumping oil at the Prirazlomnoye field in the Barents Sea in late 2007 or early 2008, the country's largest oil shipper said.

The field in the Arctic Ocean will pump 6.5 million tons of crude per year (130,000 barrels per day), Sovcomflot, Russia's largest shipping company by tanker capacity, said Wednesday in a statement posted on its web site. (Bloomberg)

S&P Raises Gazprom Rating

Gazprom had its debt rating raised one level to BB, two steps below investment grade, by Standard & Poor's on Thursday as it benefited from higher gas prices and refinanced some debt.

Standard & Poor's may raise the company's rating again to BB+ "if and when" Gazprom receives $7 billion for a 10.7 percent stake it sold to the government, increasing state ownership to a direct majority, the rating company said.

Moody's rates Gazprom Baa3, its lowest investment grade. (Bloomberg)

Blast at Rosneft Oil Depot

State-owned oil company Rosneft stopped work at its oil depot in the Arkhangelsk region, in northern Russia, after an explosion Thursday killed two contract workers.

The blast occurred at about 8:55 a.m. Moscow time at a tank farm near the Arkhangelsk port, spokesman Nikolai Manvelov said. The fire was extinguished by 10:30 a.m., he said. (Bloomberg)

Novatek, Titan Deal

Gas producer Novatek has signed an agreement with Titan Group to develop petrochemicals processing in the Omsk region. The companies will use existing facilities to refine liquefied petroleum gases into materials such polypropylene, synthetic rubber, Novatek said in a statement today.

Titan is a group of petrochemicals units based in the region. (Bloomberg)

Evraz H1 Profit Up 10%

Steelmaker Evraz said first-half profit rose 10 percent as domestic sales surged.

Net income advanced to $729 million, or $5.65 a share, from $660.7 million, or $5.43, Evraz said Thursday in a statement. Revenue rose 27 percent to $3.63 billion in results to International Financial Reporting Standards.The earnings are the first Evraz has reported half-yearly under IFRS. (Bloomberg)

Evraz Out of Ukraine Race

LONDON -- Steelmaker Evraz said Thursday that it would not participate in the privatization of Ukraine's top steelmaker, Kryvorizhstal, saying a deal would not meet its criteria to generate returns.

The London-listed company said it would continue to focus on greenfield and brownfield investments in its mining assets, further acquisition of downstream assets, as well as return driven capital expenditures primarily in Russia. (Reuters)

Mechel Drops Output Plan

Metals and mining company Mechel has dropped plans to increase steel output after falling international prices persuaded it to concentrate on increasing coal output.

The company will produce 6 million tons of steel this year, the same as in 2004, instead of increasing output by 5 percent as planned, Mechel chief executive Vladimir Iorich said Thursday in an interview in London. The Moscow-based company plans to increase coal output 25 percent to 20 million tons per year by 2010, he said. (Bloomberg)

RusAl Sales Flat

Russian Aluminum, the world's third-largest aluminum producer, said 2005 revenue would at least match the $5.4 billion generated last year.

RusAl probably will "slightly" increase capital spending next year from the $1.1 billion in expenditure slated for 2005, chief financial officer Vladislav Solovyov said Thursday in London. The company will rely on project finance and existing equity to fund expansion plans, as it has no immediate plans to sell shares or bonds, he said.

RusAl plans to invest $7 billion to develop mines and build smelters and hydropower stations in Russia, Tajikistan and Nigeria to rival Alcoa, the world's largest aluminum producer. (Bloomberg)

Polimetall H1 Net Plunges

Polimetall, which produces more than three-quarters of Russia's silver, said first-half profit fell 58 percent as tax payments increased and the ruble rose against the dollar.

Net income dropped to $6.7 million, from $16.0 million in the year-ago period, Polimetall said Thursday in a statement. Revenue rose to $114.7 million from $92.5 million in earnings to U.S. generally accepted accounting standards. (Bloomberg)

Cargo Jet Revival

The government may fund the resumption of production of the An-124, the only airplane in the world capable of carrying cargo with a weight of 150 metric tons and a diameter of 6.5 meters, Vedomosti said Thursday.

The 2006 budget sets aside 70 billion rubles ($2.45 billion) for the creation of an investment fund for strategic projects, and Energy and Industry Minister Viktor Khristenko wants $407 million of it to go to modernizing the Aviastar plant to restart production of the jet, known as the Ruslan, the newspaper said, citing documents from Khristenko's ministry. (Bloomberg)

VSMPO Share Trade Halt

Trading of shares in VSMPO Avisma, the world's biggest titanium producer, was halted on the Russian Trading System by the nation's market regulator after a court arrested company stock.

The RTS halted trading in VSMPO before the start of Thursday's session in response to a request from the Federal Service for Financial Markets, the exchange said on its web site.

A Sverdlovsk court on Monday arrested about 70 percent of VSMPO shares following a claim by Renova, a holding company controlled by billionaire Viktor Vekselberg. Renova earlier this year sold its 13 percent in VSMPO to some company managers. (Bloomberg)

Eurocement Fined $35M

The Federal Anti-Monopoly Service said Thursday that it would levy a fine of about 1 billion rubles ($34.9 million) against Eurocement Group, Russia's largest cement maker, to compensate for the illegal revenues it made by raising the prices, the anti-monopoly watchdog said in a statement on its web site.

On Monday, the service ruled that Eurocement, which holds 55 percent of Russia's cement market in five out of seven federal districts, must lower prices by Nov. 1 or face a breakup. The state agency said the manufacturer broke antitrust laws by hiking prices. (MT)