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. Last Updated: 07/27/2016

Business in Brief

Reserves Hit $194.2Bln

The country's foreign currency and gold reserves, the world's fifth biggest, rose to a record $194.2 billion last week as revenue increased from oil exports.

The reserves added $5.7 billion in the week ending on Feb. 10, the biggest increase since the first week of 2006, the Central Bank said in a statement Thursday. The reserves surged 46 percent, or about $58 billion, in 2005. (Bloomberg)

WTO Entry Date

Russia could join the World Trade Organization as soon as this summer and no later than Jan. 1, 2007, Alexei Mordashov, head of the Russian Union of Industrialists and Entrepreneurs' committee on the WTO, said Thursday.

Mordashov, who is also CEO of steelmaker Severstal, stressed that the United States wa effectively the only WTO member with which Russia had yet to finalize its terms for joining the 150-member organization.

The main sticking points in the Russian-U.S. talks are intellectual property rights and foreign banks' access to the Russian financial market. (MT)

Rosneft in Pipeline Talks

Rosneft is in talks with pipeline monopoly Gazprom to ship more natural gas, Vedomosti reported Thursday, citing a Rosneft presentation.

State-owned Rosneft hopes to reach an agreement with Gazprom in the first half of this year, the newspaper said.

Rosneft may be able to use its political resources to reach an agreement with state-controlled Gazprom, the newspaper said, citing an unidentified Gazprom employee.

Gazprom provides independent gas producers access to its pipeline network and accepts gas based on the technical capabilities of the system, the newspaper said, citing a second unidentified Gazprom representative. (Bloomberg)

Bernanke on Energy

WASHINGTON -- A change in the export policies of energy suppliers like Iran or Russia would hurt those countries, but also presents a risk to the U.S. economy, U.S. Federal Reserve Chairman Ben Bernanke said Thursday.

"It cuts two ways: It would hurt the Iranians quite a bit to stop exporting the oil; it would hurt the Russians quite a bit to stop exporting their natural gas," Bernanke told the U.S. Senate Banking Committee.

"Whereas there are substantial reserves of oil and natural gas in the world, a large share of them are in areas where there's geopolitical uncertainty or geopolitical risk, and that means there is a risk factor for the economy," he said. (Reuters)

Mineral Resources Tax

Proposals for differentiation of the mineral reserves extraction tax based on deposits' geological complexity are to be sent to the Cabinet for review within two weeks, Deputy Economic Development and Trade Minister Kirill Androsov said Thursday, Interfax reported.

The tax's flat rate has been a frequent cause for complaints by companies involved in mineral resources production, which say the current system is unfair to those trying to use or develop more complex, and hence more expensive, deposits. (MT)

Rosneft to Borrow $2Bln

LONDON -- State-owned oil company Rosneft is slashing its borrowing costs by almost two-thirds with a $2 billion loan, bankers arranging the deal said.

ABN Amro, Barclays, Dresdner Kleinwort Wasserstein and JPMorgan Chase underwrote the five-year secured deal, said the bankers, who declined to be identified.

Rosneft will pay an interest margin of 0.65 percentage point over interbank lending rates, down from the 1.80 percentage point it was charged in September for a similar $2 billion credit, the bankers said. The money will be used to refinance domestic ruble loans and to pay for exploration licenses ahead of a planned initial public offering. (Bloomberg)

Norwegian Gas for Poland

WARSAW -- Poland may start buying as much as 5 billion cubic meters of natural gas per year from Norway in three years, Rzeczpospolita reported Thursday, citing Polish Deputy Economy Minister Piotr Naimski.

Polish natural gas monopoly Polskie Gornictwo Naftowe i Gazownictwo plans to renew talks next week with Norway's Statoil on building a new gas pipeline and shipping the fuel, Naimski said, the newspaper reported. The two companies broke off earlier negotiations in 2001, Rzeczpospolita said.

Poland is seeking to diversify its natural gas supplies after Gazprom's dispute with Ukraine in January over prices stanched shipments of the fuel for two days. (Bloomberg)

Lawmaker Speaks on Piracy

WASHINGTON -- Russia will have a difficult time getting approval from the U.S. Congress to join the World Trade Organization unless it cracks down on the piracy of movies and software, a top Republican lawmaker said.

"American companies are getting a raw deal in Russia," U.S. Representative Clay Shaw of Florida, the chairman of the trade subcommittee of the House Ways and Means Committee, said at a hearing.

Without a change, a vote on Russia's ascension to the WTO would be "extremely controversial," he said. (Bloomberg)

Intourist Plans Flotation

Investors nostalgic for communism may soon get a chance to buy shares in Intourist, the dreaded former Soviet travel agency whose job was less to ensure tourists had a good time than to keep them under control.

Kommersant said Thursday that Intourist's parent company, conglomerate Sistema, was preparing the company for an initial public offering this year.

It quoted Sistema president Vladimir Yevtushenkov as saying he wanted to exit Intourist because it was a noncore asset.

If the IPO option does not work, then the company will be sold to a buyer in the tourism sector, Yevtushenkov said. Sistema owns 72 percent of Intourist. (Reuters)

Sistema Bids in Egypt

Sistema, which controls Mobile TeleSystems, Eastern Europe's biggest mobile phone company, is planning to bid for Egypt's third mobile phone license, Kommersant reported Thursday, citing Sistema president Vladimir Yevtushenkov.

The Egyptian government plans this month to invite bids for the license, which will include so-called third generation technology, or 3G. (Bloomberg)

Aeroflot Offered Discount

Airbus has offered flag carrier Aeroflot a $100 million discount as it competes with Boeing for a $3 billion contract to deliver 22 new long-haul planes, Vedomosti said Thursday.

The paper quoted a source close to Airbus as saying that the firm had offered the discount on its Airbus A350 aircraft, which is up against Boeing's 787 Dreamliner for the deal.

Quoting sources at the Russian carrier, Vedomosti said Aeroflot, which tendered for the long-haul aircraft last year, wanted to buy 22 planes worth $3 billion, and that it might sign an option to buy a further 12.

Aeroflot and Airbus officials declined comment. (Reuters)

Sberbank to Pay Dividend

ST. PETERSBURG -- State-run Sberbank plans to pay 8.5 percent of its 2005 net profit in dividends, with the payout ratio unchanged from 2004, CEO Andrei Kazmin said Thursday.

The bank's net profit in 2005, calculated under Russian accounting standards, was 64.5 billion rubles ($2.28 billion), compared with 44.2 billion rubles ($1.56 billion) in 2004. (Reuters)

Stake in Shipper Sold

The controlling owners of Far Eastern Shipping, the nation's third-largest shipper, increased their hold on the company by winning Thursday's auction for a 20 percent stake in it, Interfax reported.

Industrial Investors beat Severstaltrans by agreeing to pay 3.92 billion rubles ($139 million) for the stake, the news agency said. Basic Element and Alfa Group also took part in the auction, the agency said.

The sale values the company at $700 million. (Bloomberg)

RTS Futures Contract

LONDON -- The Russian Trading System plans to expand its market for derivatives by offering the first futures contract on the country's dollar-denominated government bonds.

The contract, to be listed Feb. 20, will allow investors to bet on prices for the government's most-traded eurobond, which matures in 2030, RTS said in a Feb. 14 statement.

Russia's largest bond gained 26 percent per year on average for the past five years as the expanding oil-led economy improved the government's ability to pay its debt. (Bloomberg)