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. Last Updated: 07/27/2016

Business in Brief

GDP Growth Slows in H1

Gross domestic product probably expanded 5.6 percent in the first half of the year, slower than 7.9 percent in the same period a year ago, Interfax reported, citing Economic Development and Trade Minister German Gref.

The government expects the country's economy will probably expand about 5.8 percent this year, slower than the 7.1 percent growth of 2004.

Russian industrial output rose in June, following a decline in May, and a pickup in demand for consumer goods and food suggests economic growth may meet the government's target of at least 5.8 percent this year. (Bloomberg)

S&P Affirms Russia Rating

LONDON -- Standard & Poor's affirmed its investment-grade rating for Russia at BBB- with a stable outlook on Tuesday, saying that the credit rating, while underpinned by a strong fiscal position, was constrained by political risks.

"Russia's fiscal and external balance sheets continue to strengthen markedly in 2005, thanks to constant high oil prices and successful debt management," sovereign ratings analyst Helena Hessel said. "However, fiscal policy has become less prudent, and Russia's macroeconomic stability has weakened as growth slowed and inflation increased," she added. (Reuters)

LUKoil Refinery Upgrade

Oil company LUKoil has started a $500 million upgrade at a refinery in Nizhny Novgorod to produce low-sulfur diesel fuel to meet European standards.

Reconstruction at LUKoil-Nizhegorodnefteorgsintez will be completed in 2009, the company said Tuesday. The works will not reduce output. (Bloomberg)

Sakhalin-1 Oil Delivery

An ExxonMobil-led venture can begin delivering oil and gas from the Sakhalin-1 project to a pipeline to the mainland starting Sept. 1, Interfax reported, citing Rosneft vice president Ramil Valitov.

Pipelines operated by Rosneft-Sakhalinmorneftegaz will be ready to deliver the oil and gas to the Khabarovsk region, the news agency said. Rosneft will buy the first 700,000 tons of oil produced from the project off the country's Pacific coast to help supply the company's Komsomolsk refinery for seven months, Interfax said. (Bloomberg)

Oil Spill on Sakhalin

An ExxonMobil vessel spilled 5.5 cubic meters of diesel offshore Sakhalin Island on Tuesday, state-owned Rossia television reported, without citing anyone.

A Japanese tanker contracted by an ExxonMobil unit hit an unidentified underwater object in the Sea of Okhotsk near the Chaivo oil and gas field, which is being developed by the ExxonMobil-led Sakhalin-1 venture, the television channel said on its web site.

A Royal Dutch/Shell-led venture, which is tapping fields close to Chaivo, said the accident occurred. (Bloomberg)

Kiev Clears Oil Companies

KIEV -- Ukrainian regulators on Tuesday ruled that there was no collusion among Russian oil companies earlier this year during a fuel crisis that caused gasoline prices to rise sharply and filling stations to run dry.

But the Anti-Monopoly Committee fined British-Russian oil company TNK-BP 50,000 hryvnas ($9,980) for distributing unreliable information in connection with the crisis, which prompted the government to briefly impose price controls.

Committee head Oleksiy Kostusev said that it had found no evidence of anti-competitive activity. (AP)

Sibneft Explores in Far East

Oil producer Sibneft said it had started exploration work on an offshore region that may hold more than 1 billion tons (7.3 billion barrels) of oil reserves.

The company plans to collect seismic data at the Tumansky block in the Anadyr Bay section of the Bering Sea, Sibneft said Tuesday. Sibneft may start drilling next year in the offshore area, which is part of the Chukotka region in the Far East. (Bloomberg)

Yukos' Beilin Stays Away

Yukos deputy CEO Yury Beilin remained abroad Tuesday amid reports he had been summoned by the Prosecutor General's Office, a source close to Yukos said Tuesday.

Beilin was still abroad, the source said, without providing any details of his travel schedule. The source asked for anonymity due the sensitivity of the situation. The press offices of both Yukos and the Prosecutor General's Office declined to comment.

Earlier reports said that Beilin was summoned back to Moscow in connection with possible criminal charges related to overproduction of oil at Yuganskneftegaz, a former unit of the troubled oil major. (MT)

Darkin on Pacific Pipeline

State-run oil pipeline monopoly Transneft needs to meet environmental and safety standards for a planned $11.5 billion oil pipeline to the Pacific Ocean, said Primorsk Governor Sergei Darkin.

Transneft plans to build the 4,100-kilometer pipeline to carry oil from Siberian oil fields to Asian customers, including China and Japan. The company will build an oil port in Perevoznaya Bay in the Primorsk region to load crude into tankers. (Bloomberg)

Bulgaria Stalls UES Sale

SOFIA, Bulgaria -- Bulgaria postponed for a second month the sale of two power plants to Unified Energy Systems in a transaction worth 765 million euros ($928 million).

The Bulgarian Privatization Agency said Tuesday it had delayed closing the sale for 30 days after a Fair Competition Commission ruling last week.

The commission said full ownership of the two power plants would monopolize Bulgaria's energy market and UES would have to choose one of the plants. (Bloomberg)

Evraz Units Boost Profit

Steelmaker Evraz Group said profit soared in 2004 at its three Siberian steel mills, which account for about one-fifth of the country's steel output.

Net income at Nizhny Tagil Iron & Steel rose to $391.4 million under international financial reporting standards, from $80.7 million in 2003, Evraz said Tuesday. Zapadno-Sibirsky Metallurgichesky Kombinat's profit rose to $382 million from $100.7 million, and Novokuznetsk Iron & Steel's profit totaled $208.5 million. (Bloomberg)

Fortum Stake in TGC-1

HELSINKI -- Finnish utility Fortum expects its stake in Russia's new northwestern power generation company, TGC-1, to increase to over 20 percent from 18 percent, Fortum CEO Mikael Lilius said Tuesday.

Lilius said that Fortum's stake in power firm Lenenergo had increased to 32.8 percent as the amount of shares had decreased. "This means also our stake in TGC-1 will grow. It's not final yet, but it's clear it will be over 20 percent," Lilius said. (Reuters)

Norilsk Q2 Production

Norilsk Nickel said it produced 61,000 tons of the metal in the second quarter of 2005.

Nickel production totaled 120,000 tons in the first half of this year, the Moscow-based company said Tuesday. Second-quarter copper output reached 112,000 tons and first-half output of the metal totaled 225,000 tons, Norilsk said. (Bloomberg)

Alcoa to Upgrade Plants

Alcoa has agreed to borrow $75 million from the European Bank for Reconstruction and Development, and it will use the money to upgrade two plants, the Samara and Belaya Kalitva rolling mills.

Alcoa and the EBRD said on Tuesday in a joint statement that the loans included a $25 million credit being arranged by HSBC USA. (Bloomberg)

Diamond Maker's Profits Up

Alrosa, a mining company that produces one-quarter of the world's rough diamonds, said 2004 profit almost doubled, Interfax reported.

Net income rose to 12.1 billion rubles ($421.1 million) from 6.36 billion rubles a year earlier, Interfax wrote, citing Alrosa's accounts. (Bloomberg)

Bank Discloses Ownership

Russia's 10th-largest bank by assets, Promyshlenno-Stroitelny Bank, has disclosed its ownership structure, Russian media said Tuesday, citing a bank document.

As of June 1, the bank's supervisory board chairman, Vladimir Kogan, had a roughly 23 percent stake in the St. Petersburg-based bank. Kogan is also president of the St. Petersburg banking group, of which the bank is a member. His deputy at the banking group, David Traktovenko, also owned a 23 percent stake as of June 1, news reports said.

The largest shareholder is state-controlled Vneshtorgbank, which earlier this year bought a stake of 25 percent plus one share and plans to increase its stake to 76 percent at a later time, Vedomosti said. (MT)