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. Last Updated: 07/27/2016

Business in Brief

2005 GDP Growth at 6%

The economy expanded by about 6 percent last year, Interfax reported, citing Vladimir Sokolin, head of the State Statistics Service. Final results for growth are not available yet, the news agency cited Sokolin as saying Tuesday.

Inflation in January will be about the same as it was in the month a year ago, when it amounted to 2.6 percent, the news agency said.

Russia's $521 billion economy expanded for a seventh consecutive year, supported by high prices for oil. (Bloomberg)

2005 Industrial Production

Russian industrial output rose 4 percent last year, slower than the year before as producers in the world's second-largest oil supplier spent less on developing new fields.

Annual output rose 7.3 percent in 2004. In December, output rose 6.6 percent from November and 4.6 percent from December 2004, the State Statistics Service said Tuesday.

Oil output grew 2.2 percent from a year earlier, to 470 million tons, the slowest pace since 1999. (Bloomberg)

Shtokman Commission

The Industry and Energy Ministry is to create a special commission to draft a production-sharing agreement for Gazprom's Arctic Shtokman gas fields, the ministry said in a statement Tuesday. The commission will participate in negotiations with Gazprom's future partners in developing the fields.

Gazprom is expected to decide on the foreign partners in the $15 billion project to develop the shelf, which is estimated to hold up to 3.5 trillion cubic meters of gas, at some time in March.

The shortlist includes Norway's Statoil and Norsk Hydro, France's Total and U.S. energy giants Chevron and ConocoPhillips. (MT)

Oil Reserves Replacement

Russia replaced 61 percent of the oil it extracted last year and 110 percent of the gas it produced, the first time in 15 years that gas reserves grew faster than output, Interfax said, citing the resources agency.

Oil and gas companies logged 300 million tons of oil and gas condensate reserves and 660 billion cubic meters of gas reserves last year, Interfax said.

Gas reserves grew mainly on Gazprom's exploration at the Shtokman field, under the Barents Sea, Interfax said. (Bloomberg)

Iranian Gas to Georgia

TBILISI, Georgia -- Georgia's energy minister said Tuesday after returning from talks in Tehran that Iran had expressed a readiness to export natural gas to the country severely hit by a sharp drop in Russian gas deliveries.

Millions of Georgians remained without gas Tuesday in freezing temperatures because of gas shortages that followed pipeline blasts in the republic of North Ossetia, which borders Georgia.

The incident has prompted Georgia's pro-Western government in Tbilisi to urgently seek to diversify its energy imports. (AP)

Ukraine's Gas Consumption

KIEV -- Ukrainian Prime Minister Yuriy Yekhanurov said his country must reduce its daily gas consumption at least 15 percent "to avoid any instability and to calm Russia."

Ukraine, the main gateway for Russian gas to Europe, is using more gas to produce heat and power, after a Siberian cold front saw temperatures plunge. Russia's state-run gas exporter, Gazprom, said Monday that Ukraine was taking more gas than it had agreed to, curbing supplies to Europe. (Bloomberg)

Swedes Buy Saneco

Sweden's West Siberian Resources said Tuesday that it had agreed on the $140 million purchase of small oil producer Saneco, which pumps around 5,700 barrels of crude oil per day.

WSR said it would raise up to $170 million in debt and equity in the first half of 2006, which will be used to fund the cash portion of the acquisition, among other things. (Reuters)

Severstal's Estonian Bid

Severstal will offer $160 million for Estonia's Galvex plant, which makes 500,000 tons of hot-dipped galvanized steel per year, Eesti Paeevaleht reported, without saying where it got the information.

Galvex owes about $150 million to investment fund SPCP Group, which also aims to take over the factory, located at Muuga harbor in Tallinn, the daily reported on its web site Tuesday. (Bloomberg)

Zero Zinc Duty Extended

The government said Tuesday that it had extended indefinitely a zero import tariff on zinc ores and concentrates, and that it had scrapped a 5 percent import duty on iron ores and concentrates. Initially, Russia scrapped a 5 percent import tariff on zinc ores and concentrates for nine months to support domestic zinc producers.

Russian steelmakers produce steel largely from iron ore mined within the country. But with most domestic mining assets already controlled by key steel companies, some majors like Magnitogorsk Iron & Steel Works are increasingly looking for more imports, mainly from Kazakhstan, Iran and Ukraine, as well as from Brazil. (Reuters)

Norilsk to Boost Output

Norilsk Nickel may increase nickel output by as much as 2.1 percent this year. Nickel output was unchanged at 243,000 tons last year and is expected to rise to 243,000 tons to 248,000 tons in 2006, the Moscow-based company said in an e-mailed statement Tuesday.

Copper production rose 5,000 tons to 452,000 tons and will this year fall to 422,000 tons to 427,000 tons. (Bloomberg)

SUAL 2005 Output

SUAL produced 13 percent more aluminum last year, surpassing 1 million tons for the first time ever.

Aluminum output rose to 1.05 million tons, the company said in a statement Tuesday. Production of alumina, which is used to make aluminum, increased 11 percent to 2.29 million tons. Output of bauxite, which is used to make alumina, rose 7.8 percent to 5.41 million tons. (Bloomberg)

Polimetall to Raise Output

Polimetall, the nation's leading silver producer and second-biggest gold miner, will sell shares in London in the fourth quarter and plans to boost production by as much as 30 percent by 2008.

The company's silver production will rise by 20 to 30 percent from 18.9 million ounces last year, and gold output will increase by the same margin from 243,000 ounces, CEO Vitaly Nesis said Tuesday by telephone. (Bloomberg)

Bombardier Expansion

Bombardier's rail division is expanding in Russia and will soon start a joint venture in the country to reduce its reliance on European business, Wolfgang T?lsner, the unit's operating head, told Financial Times Deutschland.

Bombardier is in talks with Russian partners about the assembly of locomotives and undercarriages as well as about engineering services, T?lsner told the newspaper.

Demand is increasing in Russia, where the infrastructure needs to be upgraded and where there are thousands of communities that are accessible only by rail, Financial Times Deutschland said. (Bloomberg)

Debut 30-Year Bond Sale

Russia plans to sell its first 30-year bonds in rubles this year, the Finance Ministry said Tuesday, eight years after the nation defaulted on $40 billion of debt.

The government will sell 30 billion rubles ($1.1 billion) of 30-year bonds, Finance Ministry spokesman Vitaly Krasnyuk said Tuesday in a telephone interview in Moscow.

The coupon will be about 7 percent and will be paid twice yearly. (Bloomberg)

VTB to Borrow $4Bln

Vneshtorgbank, the country's second-biggest bank, plans to borrow about $4 billion this year, Interfax reported, citing a bank executive.

Part of the money will be borrowed in rubles and the rest will come from abroad, senior vice president Denis Ursulyak told the news service. Vneshtorgbank borrowed about the same amount last year, Interfax reported, without providing more details. (Bloomberg)

New Rothschild's Head

LONDON -- Rothschild has appointed Victor Nekrassov as chief executive of the investment bank's business in Russia and the CIS, the firm said on Tuesday.

Nekrassov, who will join the bank in February, is currently finance director and first deputy chief executive of Amtel-Vredestein group, a tire and related raw materials producer in Russia and the Netherlands, which is listed on the London Stock Exchange. (Reuters)