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. Last Updated: 07/27/2016

Business in Brief

Spending Hike Passed

State Duma deputies on Wednesday approved the government's proposal to increase this year's budget spending by 124.7 billion rubles ($4.4 billion), a move that could speed up inflation beyond the authorities' target.

Additional money will be spent mostly on financial assistance to regional governments and funding state-run Vneshtorgbank's acquisition of the Central Bank's foreign subsidiaries.

The country still expects to end the year with a budget surplus of more than $50 billion. (Reuters)

Sibneft Purchase Approved

Prime Minister Mikhail Fradkov has signed an order approving gas monopoly Gazprom's $13.1 billion purchase of oil firm Sibneft, news agencies quoted a source as saying on Wednesday.

The government has a majority of seats on the gas giant's board and must officially approve the purchase of 72 percent of Sibneft's shares for the deal to go ahead.

Interfax and RIA-Novosti quoted a source familiar with the situation as saying the board would discuss the issue "in the next few days."

Gazprom agreed to buy the majority stake in Sibneft last month from Millhouse Capital, the investment vehicle of Roman Abramovich. (Reuters)

Decisiveness Needed

The government needs to make "systematic decisions" to sustain growth of about 6 percent a year and increase living standards, said Oleg Vyugin, head of the Federal Service on Financial Markets.

"We need to come to a political consensus," Vyugin said Wednesday. "We need growth, but we need to make systematic decisions to sustain that growth, not just any decisions."

Russia's economy is seen expanding about 6 percent this year, in line with the government's earlier forecast, he said. The ruble "will be more or less stable" through 2005, Vyugin said. (Bloomberg)

Most Firms Face Tax Woes

The majority of large firms working in Russia have had recent clashes with the tax authorities, according to a study presented by Ernst & Young on Wednesday.

Of 60 international and local companies surveyed, 80 percent of companies have had tax disputes with Russian authorities in the last three years, the survey said. Forty-three percent of survey respondents were multinationals.

"The majority (92 percent) of those tax disputes were taken to court, with the majority (90 percent) of reported court decisions concluded in favor of the survey respondents," the consultancy and accounting firm said in a statement.

Most foreign companies said the tax regime was detrimental to Russia's chances of attracting investment from overseas. (MT)

Rosneft Output Soars

State-owned Rosneft increased oil output 3.4 times to 54.8 million tons (1.47 million barrels per day) in the first nine months of the year, after it took over the unit that used to pump 60 percent of Yukos' crude.

Net income for the period totaled more than 96 billion rubles ($3.4 billion), the company said in a statement, without giving a year-earlier comparison. The profit was based on Russian accounting standards. (Bloomberg)

Sinopec Gets Blocking Stake

State-owned Rosneft granted China Petroleum & Chemical Corp. a 25.1 percent blocking stake in a project to develop oil and gas fields near Sakhalin Island.

Rosneft will hold 49.8 percent of the offshore project, from 74.9 percent, the company said in a statement on Wednesday.

Rosneft and the Chinese company, known as Sinopec, agreed to form a venture and approve a new exploration program for the Sakhalin-3 project on July 1, the day after Chinese President Hu Jintao met with President Vladimir Putin in Moscow. The two companies plan to drill at least one well next year. (Bloomberg)

Gazprom Tanker Tender

State shipping company Sovcomflot has won a tender to build two ice-class 70,000-ton tankers for Gazprom to help it export crude from Arctic oil fields, Sovcomflot said on Wednesday.

The tankers will be take crude from the large Prirazlomnoye oil field, which has reserves of more than 6.5 million tons (47.65 million barrels). Gazprom plans to start shipping at the end of 2007 or at the beginning of 2008. (Reuters)

Tatneft Output Ticks Up

Oil producer Tatneft increased average daily oil output by 1.5 percent in the first nine months of the year compared with a year ago, after it drilled new wells.

Crude oil production rose to 19.1 million tons (511,750 barrels per day), the company said Wednesday. Tatneft drilled 271 new wells, 5.9 percent more than initially planned. (Bloomberg)

Koreans Join Consortium

SEOUL, South Korea -- South Korea's second-biggest oil refiner, GS Caltex, will join a consortium investing in an upstream oil project to develop an oil field west of the Kamchatka Peninsula, its holding firm said on Wednesday.

Companies from energy-deficient China, South Korea and India are keen to snap up energy assets in Russia, particularly in the country's Far East due to its geographical proximity and low shipping costs. (Reuters)

Pump Prices Inch Up

Gasoline prices rose by 0.1 percent in the week ending Sept. 25, the smallest gain since at least August, after the government persuaded oil producers to cap prices on domestic fuels.

The average price of gasoline in Russia stood at 15.99 rubles (56 cents) per liter as of Oct. 3, the State Statistics Service said Wednesday. (Bloomberg)

Dalsvyaz H1 Profit Rises

Regional telecoms firm Dalsvyaz reported a 166.3 million ruble ($5.8 million) net profit for the first half of 2005 on Wednesday and forecast a rise in full-year revenue.The company did not provide a comparative figure, as this is the first time it has released half-year accounts to International Accounting Standards. (Reuters)

Sibirtelecom H1 Profit Up

First-half net profit at regional telecoms company Sibirtelecom rose to 939.4 million rubles ($32.9 million) from 927.4 million rubles, the firm said on Wednesday.

Revenues, calculated to International Accounting Standards, edged up to 12.7 billion rubles from 10.4 billion rubles. Earnings before interest, taxation, depreciation and amortization increased to 3.7 billion rubles from 2.9 billion, Sibirtelecom, which services Siberia, said in a statement.Sibirtelecom is controlled by Svyazinvest. (Reuters)

Real Estate Share Issue

Open Investments, Russia's only traded real-estate company, said on Wednesday that it planned to raise around $90 million through the issue of 1,285,488 new ordinary shares. (Reuters)