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. Last Updated: 07/27/2016

Business in Brief

Oil Export Duties at $133?

Duties on crude oil exports may be increased to a new high of $130 to $133 per ton beginning in June as world oil prices remain near record levels, Interfax cited Alexander Sakovich, head of the customs payment department at the Finance Ministry, as saying.

On April 1, the government increased duties to $102.60 per ton, the highest level to date. They had previously been set at $83 per ton from February and $101 from December. (AP)

Surgut Profit Hits $2.4Bln

The country's No. 4 oil firm, Surgutneftegaz, made a 2004 net profit of 65.9 billion rubles ($2.37 billion), almost four times as much as in 2003, Interfax reported Tuesday.

Last year the company's profit was 17.371 billion rubles. (Reuters)

SUAL Project on Hold

The country's No. 2 aluminum producer, SUAL, has put on hold a feasibility study to build an aluminum smelter that is part of a $2.1 billion project in northern Russia, it said Monday.

SUAL said in remarks that the main reason behind the move was to give the company more time to work out ways to secure long-term energy supply contracts with local suppliers for the energy-intensive Komi Aluminum project.

At the same time, the company said construction of the smelter was still on SUAL's agenda as it presses ahead with talks with Unified Energy Systems and Gazprom on the issue. (Reuters)

No Norilsk Gold IPO

Norilsk Nickel plans to spin off to existing investors a gold company valued by analysts at more than $3 billion rather than sell shares to the public.

"It will not be an IPO," said Denis Morozov, Norilsk's deputy chief executive, in a telephone interview in Moscow on Tuesday. "It will be done through reorganization with shareholders' approval and the new company will have the same investor base as Norilsk Nickel."

Norilsk said Monday that its board proposed the creation of a new gold company combining the Polyus unit with Norilsk's 20 percent stake in South Africa's Gold Fields. (Bloomberg)

Vekselberg to Buy Miner

Viktor Vekselberg, the billionaire who controls No. 2 aluminum producer SUAL, will buy Siberian platinum and gold miner Koryakgeologodobycha, Vedomosti reported, citing Vekselberg's holding company, Renova.

An unidentified Renova representative declined to give details of the transaction, saying only that the company had bought "a certain block of shares" in the miner and that it would eventually acquire a controlling stake, the newspaper said.

A controlling stake in Koryakgeologodobycha is worth about $150 million, the newspaper said, citing Denis Nushtayev, a metals analyst at Moscow brokerage IFC Metropol. (Bloomberg)

Car Plan Approved

The government has signed off on a plan detailing the conditions for foreign carmakers who want to assemble cars in Russia, Deputy Industry and Energy Minister Andrei Reus said in a statement.

The government approved the order on Friday but did not make the announcement until Tuesday. The order comes into effect immediately, giving existing enterprises 18 months and greenfield projects 30 months to launch full production.

The plan obliges carmakers to gradually increase the proportion of domestically produced parts to 30 percent within 4 1/2 years. The order also puts into effect the scrapping of import tariffs on car parts, lifting a last barrier for foreign carmakers. (MT)

GM Factory in Tolyatti?

General Motors and AvtoVAZ may build a factory in the automobile center of Tolyatti to produce engines and transmissions, Interfax said.

GM has equipment sitting idle in Europe and Asia that can be imported for use in the new factory, the news agency said, citing Warren Browne, GM's head for the former Soviet Union. The factory would have a capacity to produce as many as 350,000 engines and transmissions per year, Browne said, Interfax reported. (Bloomberg)

GMAC Office in Russia?

GMAC, the financial services unit of General Motors, may open an office in Russia next year to capitalize on surging car sales and demand for loans, Interfax reported, citing Warren Browne, GM's head for the former Soviet Union.

A final decision will be made soon, the news service said, citing Heidi McCormack, head of GM's new business division. (Bloomberg)

Putin on Housing Shortage

President Vladimir Putin said Tuesday that by 2010, Russia should build between 70 million and 80 million square meters of new apartment space annually in order to meet the growing demand for quality housing, Interfax reported.

Putin was speaking at a State Council meeting devoted to the country's housing crisis. A working group presented a report at the meeting that found that there are 2.9 billion square meters of housing in Russia, or 19.7 square meters of living space per person.

As much as 27.5 percent of the country's families live in substandard conditions, the report found, and 5 million Russians live in dilapidated or structurally unsound buildings. (MT)

Svyaz Stake Worth $2.7Bln

The government's 75 percent minus one share stake in Svyazinvest is worth $2.5 billion to $2.7 billion, said Federal Property Management Agency head Valery Nazarov, Interfax reported.

The price may be lowered, Nazarov said, due to the "golden share," Interfax reported. The government may use the share to veto the decisions of other shareholders that are deemed threats to national security, Interfax reported.

The state may sell its stake to a single bidder, Nazarov said, but the final decision on that has not been reached. Government officials say that the Svyazinvest privatization will take place within the next two years. (MT)

Siemens 3G Tryouts

Siemens will offer third-generation mobile-telephone services in trial areas in Russia, Interfax reported.

Third-generation, or 3G, services will be offered in special business zones for technology companies that are being built in St. Petersburg, Nizhny Novgorod and the Moscow region, the news service said, citing Raymond Armes, president of the company's Russian mobile communications and information department.

Mobile TeleSystems and MegaFon, Russia's No. 1 and No. 3 mobile phone companies, and Sweden's Tele2, will be Siemens' partners in the project, Armes said, Interfax reported. (Bloomberg)

Banks in South Africa

JOHANNESBURG, South Africa -- Russian banks plan to open offices in South Africa as Russian companies do more business in Africa's largest economy, Business Day said, citing Konstantin Korishchenko, deputy chairman of Russia's Central Bank.

Russian and South African banking authorities met for the first time yesterday in Pretoria, South Africa's capital, the Johannesburg-based newspaper said.

Korishchenko attended the meeting and was accompanied by representatives of Vneshtorgbank, Bank Moskvy and Nomos Bank, as well as the Association of Russian Banks, the newspaper said. (Bloomberg)

Kone's Russian Venture

HELSINKI -- Finland's Kone will create a joint venture with Russia's Karacharovo Mechanical Factory, the elevator and escalator maker said Tuesday, adding it would own 40 percent of the new firm, KMZ-Kone.

The deal includes an option for Kone to increase its holding to a majority stake at a later date, it said, adding that together the two firms have a Russian market share of more than 35 percent, and the joint-venture's annual turnover would exceed 70 million euros ($90.76 million). (Reuters)

PetroKazakh to Drop Case

PetroKazakhstan, a Canadian-based company, plans to drop a court challenge that reduced oil exports by its Kazakh-based joint venture with LUKoil, Russia's biggest oil producer.

A Kazakh court on April 22 "will consider the announcement by PetroKazakhstan that it is dropping its claims against Turgai Petroleum," the joint venture, according to a Turgai Petroleum statement that was sent out Tuesday by LUKoil. (Bloomberg)