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. Last Updated: 07/27/2016

Business in Brief

Russia Seeking Discount

Russia will seek a discount from the Paris Club group of creditors for early repayment of the country's debt, said Igor Shuvalov, an aide to President Vladimir Putin.

Economic Development and Trade Minister German Gref will seek separate discounts from the creditors at the next Paris Club meetings in Paris on March 17- 19, Shuvalov told reporters Wednesday.

Putin has said the government should repay its $115 billion foreign debt as soon as possible to sustain economic growth. The debt decreased from $119.7 billion in early 2004, according to the Finance Ministry. (Bloomberg)

Rosneft Project Review?

LONDON -- State-owned Rosneft may face a setback to oil exploration plans in the Far East after lawmakers asked prosecutors to review the project, RIA-Novosti reported, citing a local official.

Rosneft and state-controlled Korea National Oil Corp. plan to spend $150 million to explore the Zapadno-Kamchatsky deposit in the Okhotsk Sea, drilling three appraisal wells by 2008.

Lawmakers in the Kamchatka region asked Prosecutor General Vladimir Ustinov to investigate if Rosneft's plans violate exploration and environmental laws, RIA-Novosti said, citing Anna Sokolova, a local parliament spokeswoman. (Bloomberg)

Yukos VP Fired

Yukos, whose largest oil-producing unit was sold last year in a tax dispute with the government, ended the employment of senior vice president Alexander Temerko, as the company reorganized its management.

The decision "is in line with appropriate shifts in management responsibilities as a result of the planned restructuring," Yukos said Wednesday in a statement.

Temerko was in charge of government relations at Yukos. He commented on the company's operations, its oil exports and its fight for jailed investors Mikhail Khodorkovsky and Platon Lebedev. (Bloomberg)

LUKoil May Lose Rights

LUKoil, Russia's biggest oil producer, may lose the rights to work an oil field in the north because of delays in development, the Natural Resources Ministry said in a statement.

The ministry sent a nine-month warning to LUKoil, demanding the company submits technological documents for the field's development and infrastructure. LUKoil is pumping less oil and gas from the field than planned under the permit issued, it said.

LUKoil's Pyzh-Yel field, located in Komi region, holds 62.3 million barrels of oil in probable reserves, the ministry said. (Bloomberg)

Sakhalin-1 Pumping Plans

ExxonMobil, which heads the $12 billion Sakhalin-1 venture, plans to start pumping crude oil and gas from the project in the middle of this year, Interfax said, citing Exxon vice president Glenn Waller.

The oil and gas will be delivered to Khabarovsk and Sakhalin regions, Interfax said Wednesday. Sakhalin-1 is in talks with China and Japan about oil and gas deliveries, Interfax said.

Russia is forcing the ExxonMobil venture to start gas production off the Pacific coast so the U.S. company respects the development permit and supplies local customers, Galina Pavlova, director of the oil and gas department at the Sakhalin region administration said in January. (Bloomberg)

More Oil to Angarsk

LUKoil and Rosneft have asked oil pipeline monopoly Transneft to double capacity of a pipeline to Angarsk, from where oil is sent by rail to China, Vedomosti reported, citing Transneft vice president Sergei Grigoryev.

The companies want to expand the pipeline to 30 million tons per year from current 15 million tons, he said.

The Angarsk refinery is the main recipient of crude by the pipeline and has processing capacity of 15 million tons per year, the newspaper said. (Bloomberg)

Port Construction Frozen

LONDON -- Krasnodar region authorities suspended construction of a 1 billion euro ($1.3 billion) port because of safety violations by an investor, NTV reported Wednesday.

The port, to become Russia's third- largest by cargo volumes, is being built on the Taman Peninsula, NTV reported. The Krasnodar administration has asked Tolyattiazot, one of the port eight investors, to eliminate violations, NTV said, citing Alexander Gavrilov, a deputy governor in the region.

Tolyattiazot, which has already invested $300 million in the project, denies the claims, NTV reported, citing Vladimir Makhlai, the company president. (Bloomberg)

Wintershall-Gazprom Deal

BASF's Wintershall unit agreed with Gazprom on the price for natural gas extracted by their venture Achimgaz in western Siberia, Vedomosti reported, citing Wintershall CEO Reinier Zwitserloot.

The venture will sell the fuel to Gazprom at a price equal to the price for Russian gas in Germany, minus the cost of transportation, Vedomosti said, citing an unidentified Wintershall executive. That's about $49.40 per 1,000 cubic meters, Troika Dialog's analyst Valery Nesterov told Vedomosti.

Achimgaz plans to start production at the field within two years, Vedomosti said. Over 40 years, the venture expects to extract 200 billion cubic meters of gas and 40 million tons of gas condensate, a hydrocarbon mixture similar to light crude oil. (Bloomberg)

LUKoil's Venezuelan Plans

CARACAS, Venezuela -- Venezuela, South America's largest oil producer, will likely grant LUKoil an extra-heavy oil block to explore and develop, El Nacional reported, citing unidentified diplomats.

LUKoil has sent 16 engineers to universities in Britain to study extra-heavy oil extraction in preparation of the award, the newspaper said. No date was given, the newspaper reported.

LUKoil will also likely try to buy state oil company Petroleos de Venezuela's refineries in Germany, the newspaper said, without providing details. (Bloomberg)

Mechel Sales Unit Booms

The net profit of Trade House Mechel, the main sales unit of steel company Mechel more than tripled in 2004 to 8.5 billion rubles ($309.5 million) due to high steel prices, it said Wednesday.

The number was according to Russian accounting standards. Consolidated results for the whole group are expected in a few weeks time.

Mechel raised steel production by 16.6 percent to 6.2 million tons in 2004. Most Russian steel companies reported strong results for 2004 due to booming global demand. (Reuters)

Siemens Mobile Contract

BERLIN -- Siemens won an extension of an order for a wireless network run by phone operator MegaFon, more than tripling the contract's value to 200 million euros ($267 million).

The two companies had agreed in August to expand the network in an order initially worth 60 million euros, Siemens said in a statement Wednesday. Siemens will now also deliver equipment for MegaFon's operations in the Volga and Ural regions.

Siemens plans to complete the order this year, it said. (Bloomberg)

RBC to Sell Shares Abroad

RosBusinessConsulting, Russia's only traded media and Internet technology company, received permission from the nation's watchdog to have its shares trade abroad.

RBC will be able have up to 45 million shares, or about 40 percent of stock outstanding, traded in the form of depositary receipts, the nation's market regulator said in a statement Wednesday. (Bloomberg)

HVB Lends $100M

HVB Group, Germany's No. 2 bank, has agreed to lend its Russian subsidiary as much as $100 million so it can finance customers needs for equipment and home loans.

HVB opened up the credit line to International Moscow Bank for as long as 10 years with the possibility of extending it another five years, International Moscow Bank said Wednesday in a statement. International Moscow Bank plans to use the funds to finance projects to lease equipment to companies and to offer mortgages to individuals. (Bloomberg)

AEB Stake Buyer Named

BUDAPEST -- Gazprombank, Russia's No. 3 bank by assets, will sell its minority stake in Altalanos Ertekforgalmi Bank to AEB majority owner Kafijat, Napi Gazdasag reported.

Gazprombank, a unit of Gazprom, will sell its 25.52 percent stake in the Hungarian bank for $80 million to Kafijat, which is owned by AEB chairman Mikhail Rahimkulov, the daily reported Wednesday. (Bloomberg)