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. Last Updated: 07/27/2016

Business in Brief

February Inflation

MOSCOW (Bloomberg) -- Consumer prices rose 0.7 percent in the first two weeks of February from the previous month, Interfax reported, citing President Vladimir Putin's economic adviser, Andrei Illarionov.

Illarionov cited an early estimate by the State Statistics Service, the news agency said. Illarionov said last week that the government is likely to miss its 8.5 percent inflation target for this year after consumer prices rose 2.6 percent in January from December.

January's rise in consumer prices was the result of a 19.4 percent increase in housing and utilities costs, which are regulated by the government, Illarionov said at a news conference in Moscow on Thursday.

Reserves Fall

MOSCOW (Bloomberg) -- Foreign currency and gold reserves declined for a second consecutive week to $125.4 billion in the seven days to Feb. 11.

Reserves fell from $125.7 billion a week earlier, the Central Bank said in a statement.

Reserves were at a record-high $128.3 billion on Jan. 28. The Central Bank's holdings exceed the government's total foreign debt of $113 billion, including $44.4 billion owed to the Paris Club.

Russians Loving Euro

MOSCOW (Reuters) -- Russians bought a record 1.1 billion euros ($1.43 billion) in December and sold 272 million euros, Vedomosti reported Thursday, quoting Central Bank data.

The newspaper said the previous record of 761 million euros was set in November.

Purchases of the dollar, Russians' favorite currency, were stable at $2.6 billion in December, Central Bank data showed. The newspaper did not provide figures for households' dollar sales.

Yukos Reorganization

MOSCOW (Bloomberg) -- Yukos will get rid of its holding-company structure in May to protect the company from tax authorities, deputy chief executive Alexander Temerko said Thursday.

"The tax authorities don't understand holding companies," Temerko said. Simplifying the corporate structure will make it "easier to defend ourselves" and "easier for them to understand," he said.

Yukos will not renew contracts with exploration and production division Yukos-EP, sales and marketing division Yukos-RM and management company Yukos-Moskva, all of which it fully owns, Temerko said. Yukos Trading House will take on the administrative, logistical and marketing work and the employees, he said.

Sibur Profit Up 65%

MOSCOW (Bloomberg) -- Sibur, Gazprom's biggest petrochemical unit, said gross profit surged 65 percent last year as the company boosted production of dry natural gas, liquefied petroleum gas and polymers amid rising prices.

Gross profit rose to 16.4 billion rubles ($590 million) from 9.9 billion rubles in 2003, the company said in a statement. Sales soared 34 percent to 84.4 billion rubles. Sibur did not report other financial results.

EU Drops Gas Probe

BRUSSELS (AP) -- The European Union said Thursday it has dropped a probe into gas giant Gazprom and its Austrian counterpart, OMV, following a decision by the companies to amend their gas contract terms.

The parties removed clauses that restricted supply destinations, enabling gas importer OMV to sell the gas bought from state-controlled Gazprom outside OMV's domestic market. OMV has also agreed to increase capacity in a pipeline transporting gas from Russia to Italy via Austria.

Moreover, Gazprom will now be free to sell to other customers in Austria without having first to offer the gas to OMV.

Merger to Cost $1.9Bln

MOSCOW (Reuters) -- Gazprom plans to set aside 52 billion rubles ($1.9 billion) in its 2005 budget to merge with state oil firm Rosneft, Vedomosti reported Thursday.

Vedomosti quoted a government official as saying that the figure included up to 29 billion rubles of taxes that Gazprom was to pay in the merger while other funds were to go toward the development of the merged firm.

LUKoil to Produce Gas

MOSCOW (Reuters) -- Oil firm LUKoil plans to start producing its first gas in April, with a view to getting output up to 28 billion cubic meters per year by 2015, Vedomosti reported Thursday.

It quoted LUKoil head Vagit Alekperov as telling a conference in Houston earlier this week that the company and ConocoPhillips, which holds 10 percent of LUKoil, were also interested in exporting gas to the United States.

Vedomosti quoted LUKoil spokesman Gennady Krasovasky as saying that LUKoil controlled 1.2 trillion cubic meters of gas, 80 percent to 90 percent of which was located on the Arctic Yamal peninsula.

Vilnius to Up Rail Fees

LONDON (Bloomberg) -- LUKoil will be hit with higher shipping costs after Lithuania's decision to increase rail fees for transportation of cargoes by 15 percent, Russian Railways, or RZD, said.

Lithuania informed RZD that it will raise prices as of March 15, said Alexander Pershin, a spokesman for the rail company's Kaliningrad department.

It is the third time rates have risen in the last 12 months, putting the total increase at 41 percent, Pershin said Thursday.

Court Finds for LUKoil

MOSCOW (Bloomberg) -- PetroKazakhstan, a Calgary, Alberta-based oil company operating in Kazakhstan, must agree to process crude produced by a venture with LUKoil after a court ruled against the Canadian company.

LUKoil is seeking $100 million in damages from PetroKazakhstan after the latter company's Shymkent refinery last year stopped taking oil from Turgai Petroleum, a 50-50 joint venture between the two firms. Their dispute over the signing of an oil-processing contract went to a Kazakh court last week.

The court has "drawn a final line in the dispute," said Turgai Petroleum in a statement Thursday. "The decision has come into legal effect and should be carried out immediately."

Renova in South Africa?

MOSCOW (Bloomberg) -- Renova, the holding company controlled by Russian billionaire Viktor Vekselberg, is looking for platinum mining projects in South Africa and may announce a venture within six months, Kommersant reported, citing unidentified Renova officials.

Renova is seeking ventures with South African companies owned by black investors, as the African country promotes black-owned business to help make up for discrimination under apartheid rule, Kommersant said, citing the officials.

Norilsk Listing on Hold

LONDON (Bloomberg) -- Norilsk Nickel's plan for a London stock market listing "is not a priority at the moment," he Financial Times reported, citing Norilsk's chief economist, David Humphreys.

The plan has been put on hold due to political uncertainty in Russia and to focus on domestic projects, the paper said.

Norilsk Nickel will open an office in London, and Humphreys, who is based in London, will set up a group of mining industry experts to review the company's options outside Russia, the paper said.

Wimm-Bill-Dann Cuts

MOSCOW (Bloomberg) --Wimm-Bill-Dann, Russia's biggest dairy and juice company, will merge its juice and mineral water units and abolish a regional department to cut costs.

The changes will take effect March 1, the company said Thursday in a statement distributed on Business Wire.

Jay Yadegar, who heads the water unit, will be in charge of the combined business. Wimm-Bill-Dann is also scrapping its central Russian milk division, after which units that were supervised by the subsidiary will report directly to headquarters.

Miller Meets Kazakhs

MOSCOW (Bloomberg) -- Gazprom is considering a joint venture with Kazakhstan to upgrade a gas refinery so it can handle gas from a Kazakh field operated by BG Group and Eni.

Gazprom chief executive Alexei Miller and Timur Kulibayev, vice president for KazMunaiGaz, Kazakhstan's state-owned oil and gas company, met Wednesday in Kazakhstan to discuss the venture, which would upgrade the Orenburg refinery in Russia.