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. Last Updated: 07/27/2016

Business in Brief

Trade Surplus Widens 46%

Russia's trade surplus widened 46 percent in the January through October from the year-earlier period as crude oil shipments boosted export revenue.

The trade surplus rose to $102.8 billion, the Economic Development and Trade Ministry said in a statement from Moscow, citing its preliminary estimates.

Exports increased 37 percent to $199.8 billion, while imports grew 28 percent to $70.4 billion. (Bloomberg)

Gas Exports Forecast

Gazprom expects exports to rise 12 percent over the next three years, faster than production, as rising demand in Europe boosts fuel prices.

Gazprom expects to ship 151 billion cubic meters of gas to Europe next year, up 4.1 percent from this year's forecast for 145 bcm. Shipments will rise to 157.7 bcm in 2007 and 162.9 bcm in 2008, the Moscow-based company said Wednesday.

The total gas output in Russia, the world's biggest producer of the fuel, will rise to 652.9 bcm in 2008, Gazprom said. (Bloomberg)

TNK-BP Asset Sales

TNK-BP, BP's Russian venture, may decide whether to sell some oil production and refining assets by the end of the year.

The board will review bids for a production unit, Saratovneftegaz, and a refinery, Orsknefteorgsintez, this year, TNK-BP vice president Peter Henshaw said at a conference in Moscow on Wednesday.

TNK-BP, Russia's largest oil exporter, is folding its operating units into a new holding company, TNK-BP Holding. It may sell some units to focus on more efficient or promising assets that need investment. (Bloomberg)

Sakhalin-3 Ownership

Russia may allow foreign companies to bid for development rights to the Sakhalin-3 oil and gas field off Russia's Pacific coast, Interfax reported, citing the governor of the Sakhalin region, Ivan Malakhov.

The project's Vostochno-Odoptinsky and Ayashsky blocks, which may hold 620 million tons of oil and 767 billion cubic meters of natural gas, may be auctioned next year, Interfax reported.

Russia last year canceled the rights held by ExxonMobil and Chevron, respectively the biggest and second-biggest U.S. oil companies, to Sakhalin-3 for not developing the project since they got the rights in 1993. (Bloomberg)

LUKoil Iraq Licenses

LUKoil said Iraq may renew its contract to develop West Qurna-2, one of the world's largest oil fields, after Iraqi parliamentary elections on Dec. 15.

Iraqi Foreign Minister Hoshyar Zebari told LUKoil chief executive Vagit Alekperov in Moscow that the current government would urge the new government to renew the contract, LUKoil said Wednesday.

LUKoil will transfer a 17.5 percent stake in West Qurna-2 to ConocoPhillips, the No. 3 U.S. oil producer and a LUKoil shareholder, if the contract is renewed, the statement said. Lukoil holds 52.5 percent of the field. (Bloomberg)

Merrill Lynch Sell-Off

Merrill Lynch, the biggest U.S. securities firm by market value, sold its shares in Russian oil producers LUKoil and Surgutneftegaz in the third quarter as the stocks soared amid rising oil prices.

Merrill Lynch, based in New York, sold 2.6 million LUKoil American Depositary Receipts for $122.8 million and 1.8 million Surgut ADRs for $82.3 million, according to a filing to the U.S. Securities and Exchange Commission. (Bloomberg)

Gazprom to Pay Back Loan

Gazprom will pay back 123.8 billion rubles ($4.3 billion) on loans it used to buy control of Sibneft from Russian billionaire Roman Abramovich and his partners.

Gazprom set aside the amount in its draft budget for next year, the company said Wednesday. The company also set aside 19.8 billion rubles to build part of the so-called Northern Pipeline, which will carry gas across the floor of the Baltic Sea to Germany. (Bloomberg)

Mosenergo Share Issue

Mosenergo, Moscow's power utility, on Wednesday proposed making a $1.5 billion to $2 billion share or convertible bond issue, but analysts said the plan would destroy shareholder value.

Mosenergo first deputy managing director Dmitry Vasilyev said a share or bond issue would be the best way to raise capital, but government backing was needed.

Analysts were dismissive, saying that any share issue would dilute value for existing shareholders in a utility trapped by a tariff regime where price rises fail to match inflation. (Reuters)

Komi Project Loan

RusAl and SUAL will borrow $720 million by the end of 2008 to build an alumina mining and refining complex in the northwest Komi region, Vedomosti reported, citing project director Vladimir Kremer.

The newspaper did not say where the money would come from.

The Komi facility will cost $1.2 billion and produce as much as 1.4 million metric tons of alumina per year. RusAl and SUAL are Russia's biggest aluminum producers. (Bloomberg)

MTS Says It Will Cut Jobs

Shares in Russia's top mobile phone operator, Mobile TeleSystems, fell 10 percent on Wednesday after worse-than-expected third-quarter results and 2006 guidance disappointed the market.

MTS's MICEX-listed shares closed 5.14 percent down at 211.90 rubles ($7.38). By midday New York time, the New York-listed stock had fallen 9.61 percent to $35.18.

"Worse-than-expected results, very conservative guidance and a serious increase in [stock] liquidity over the past year -- it all combined to produce the decline [in the shares]," said a trader from a major Western bank.

Third-quarter net profit rose 3 percent, year-on-year, to $347.4 million. That compared with an average figure of $363.6 million predicted in a Reuters poll of 11 analysts. Revenues rose 27 percent from a year earlier to $1.39 billion, but compared with a market forecast of $1.41 billion (Reuters)

Coca-Cola Profit Up 58%

Coca-Cola Hellenic Bottling, the world's third-biggest bottler of Coca-Cola drinks, said quarterly profit rose 58 percent as sales in Eastern Europe increased and the company bought Russia's second-largest juice maker.

Net income climbed to 146.5 million euros ($173.3 million), or 61 cents per share, in the third quarter from a restated 92.8 million euros, or 39 cents, the Athens-based company said Wednesday in a statement. (Bloomberg)

EU Mulls Action on Ban

BRUSSELS -- The European Commission is considering taking action against Russia for banning imports of Polish meat and meat products, EU Trade Commissioner Peter Mandelson said on Wednesday.

"I am in close touch with the Polish government about serious issues in the dispute that has arisen between Poland and Russia over meat imports," he told the European Parliament.

Russia banned imports of Polish meat and meat products earlier this month, in a move that some politicians in Warsaw have interpreted as politically motivated. (Reuters)

AvtoVAZ Control

Konstantin Titov, governor of the Samara region, said Wednesday that Rosoboronexport, the state-controlled arms exporter, currently had de facto control of AvtoVAZ, Russia's largest carmaker, Interfax reported.

"We understand that de facto, though not yet legally, Rosoboronexport now controls either 51 percent or a controlling share," Titov said.

AvtoVAZ, headquartered in Tolyatti in the Samara region, is believed currently to be owned mainly by company management.

Two senior Rosoboronexport officials are expected to get a seat on the carmaker's board as part of the changes aimed to tighten the state's grip on the manufacturer of the Lada, media reported earlier this week. (MT)

New Magazine Publishers

The Russian editions of FHM and Top Sante magazines will be published as of January 2006 by a joint venture formed by Independent Media Sanoma Magazines and OVA-Press publishing house, the companies announced in a statement Wednesday.

Health magazine Top Sante and men's glossy FHM are currently published by Independent Media Sanoma Magazines, along with about 30 other titles including the Russian editions of Cosmopolitan, Harper's Bazaar and Men's Health, as well as Vedomosti and The Moscow Times.

OVA-Press publishes a range of magazines, including the Russian edition of Hello!. (MT)