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. Last Updated: 07/27/2016

Business in Brief

2006 GDP Growth

The country's economy may expand 6.2 percent this year, matching its 2005 growth rate, if the price of oil, its biggest export, averages $55 per barrel ($403.15 per ton), Interfax reported Friday, citing the Economic Development and Trade Ministry.

The ministry on Thursday raised its growth forecast for gross domestic product to 6 percent from 5.8 percent, the news service reported then.

Russia has raised its 2006 price estimate for its Urals brand of crude to $51 from $45, the ministry's press department said. (Bloomberg)

Inflation Forecast Raised

The Economic Development and Trade Ministry has revised upward its 2006 inflation target to 8 to 9 percent from the previous 7 to 8.5 percent after prices rose 0.5 percent in the first week of February, a senior official said on Friday.

"We are now giving a higher range of 8 to 9 percent in our official inflation forecast … for 2006," said Andrei Klepach, head of the ministry's planning department.

Klepach said the ministry saw the ruble strengthening to 27.7 to 27.8 rubles per dollar by the end of 2006 from the current 28.2, but that higher oil prices could push the ruble further up. (Reuters)

Trade Surplus Widens

The country's trade surplus widened to a preliminary $120 billion in 2005, the largest in more than a decade, the Central Bank said on Friday.

The trade surplus rose 40 percent in 2005 from 2004 as crude oil shipments boosted export revenue, the Central Bank said. The value of exports increased 34 percent to $245.3 billion, while imports grew 29.3 percent to $125 billion, the Central Bank said in the statement. (Bloomberg)

Shell's Budget Woes

The government has delayed until about the second half of this year approval of a budget for the Royal Dutch Shell-led liquefied natural gas project on Sakhalin Island because of the venture's cost increases.

Sakhalin-2, the world's largest oil and gas project, will face more scrutiny of its development of liquefied natural gas, the Industry and Energy Ministry said in a statement Friday.

"An independent evaluation is planned," the ministry said. (Bloomberg)

Call for More Refineries

Crude oil pipeline monopoly Transneft has urged the government to expand refineries and build a new one in the Far East to capture the higher value of exporting oil products rather than crude.

Transneft is proposing to the government that processing be increased at state-owned Rosneft's Tuapse refinery to 10 million tons per year (200,000 barrels per day) so more fuel can be exported. The refinery converted 4.1 million tons last year while about 6 million tons of crude oil were exported from the port of Tuapse, on the Black Sea, according to Industry and Energy Ministry and Transneft data. (Bloomberg)

RZD Shipments to China

Russian Railways, or RZD, increased oil shipments to China by 43 percent in January from the year-ago period.

RZD transported more than 790,000 tons (187,000 barrels per day) of oil to China last month, up from 553,000 tons in January 2005, the company said Friday in a statement. (Bloomberg)

Oil Exports to Mazeikiu

KazMunaiGaz, a bidder for Lithuanian refinery Mazeikiu Nafta, failed to agree with the government about the right to ship crude oil to the refinery. Stable supplies of crude are a condition for the sale.

"We cannot reach an agreement with Russia's Federal Energy Agency about the transit of KazMunaiGaz oil in the first quarter of 2006 to Butinge," a port owned by Mazeikiu, KazMunaiGaz spokesman Mikhail Dorofeyev said in a telephone interview Friday from Astana, Kazakhstan. "We are still negotiating transit rights for the entire year."

Yukos is selling its 54 percent stake in Mazeikiu to pay more than $28 billion in back taxes. (Bloomberg)

Pipeline Concerns

Environmentalists on Friday warned that an oil spill last month in the republic of Udmurtia demonstrated the dangers of a planned pipeline that would pass alongside Lake Baikal.

Alexei Grigoryev, an activist with the Russian Social-Ecological Union, also charged that a federal regulatory agency was trying to skew the composition of an environmental commission responsible for giving scientific approval to the Siberian pipeline project, which has strong backing from the Kremlin.

"What they're trying to do isn't just illegal, it's vandalism," Grigoryev said.

Grigoryev said authorities barred environmentalists from reaching the site of a Jan. 30-31 pipeline rupture in the republic, about 1,000 kilometers east of Moscow, preventing them from determining how much oil spilled or investigating what caused the accident. (AP)

Japanese Eye Coal Field

TOKYO -- Nippon Steel, Sumitomo and JFE Steel may buy stakes in the Eriga coal field in Eastern Siberia, one of the world's biggest deposits of the fuel, to diversify supply as prices soar.

Rising demand from steelmakers for the coking coal used to make steel more than doubled the price of the commodity last year to $125 per ton from $56. Japan is looking for new sources for the coal other than Australia, its primary supplier, to reduce costs.

The Japanese companies are part of a delegation that will visit Moscow on Feb. 19.

Development of Eriga, 800 kilometers south of Yakutsk, in the Far East, will start in 2007. (Bloomberg)

Alfa Capital CEO Quits

Anatoly Milyukov quit as chief executive of Moscow-based asset manager Alfa Capital to join Gazprombank as executive vice president, Vedomosti reported Friday, citing Milyukov.

Milyukov, 34, had worked at Alfa for five years. He earned a prestigious "red diploma" in international economics in 1994 at Moscow State University and went to work as an analyst for the World Bank before helping Credit Suisse start its Russian business that year, the paper said. (Bloomberg)

Alfa Bid for Shipping Stake

Alfa Group may bid for Russia's 19.8 percent stake in Far Eastern Shipping, the nation's third-largest shipper, Vedomosti reported Friday, citing unidentified officials at Alfa.

The financial-industrial group's Alfa Eco retail unit already agreed to pay a $16 million deposit and has bought the tender documents for the stake, which will be auctioned Feb. 16 with a starting price of $117 million, Vedomosti said.

Sergei Generalov, a former energy minister, owns around 68 percent of Far Eastern through his Promishlenniye Investory holding and had been expected to be the only bidder, Vedomosti said. (Bloomberg)

Wimm-Bill-Dann Share Sale

Wimm-Bill-Dann's biggest shareholders, Gavril Yushvayev and David Yakobashvili, have bought more shares in the company, the country's largest dairy and juice producer by sales, Interfax said Friday.

Yushvayev, a member of the company's board and its biggest investor, and board chairman Yakobashvili each bought half of the 1.13 percent stake in the company held by Yevgeny Yaroslavsky, Yakobashvili told the news service.

Yushvayev now owns a 17.13 percent stake in Wimm-Bill-Dann and Yakobashvili owns a 8.33 percent stake, giving the partners more than the 25 percent plus one share they need to block most major corporate decisions. (Bloomberg)

Ukraine Corruption Fight

WASHINGTON -- Ukrainian Interior Minister Yuriy Lutsenko said Friday that the country's pro-Western government had moved aggressively to root out corruption, prosecuting more than 10,000 police officers and bureaucrats for bribe-taking and other illicit activities.

Lutsenko, speaking at the Carnegie Endowment for International Peace, said the government had initiated prosecution of 6,500 police officers and 3,700 bureaucrats for misdeeds.

He acknowledged that only a small number had actually gone to court. "My name is Lutsenko, not Dzerzhinsky," he said, referring to the Bolshevik-era police chief known for his heavy-handed tactics. (AP)

For the Record

Russia expressed concern about new legislation in Turkmenistan that stripped thousands of retirees, including Russians, of their pensions, the Foreign Ministry said Friday. (AP)

Russia on Friday banned imports of live animals, all products of animal origin and animal feed from the Argentine province of Corrientes out of concerns related to foot-and-mouth disease, the Agriculture Ministry said. (Reuters)

Chevron's Kazakh unit said it paid 265 million tenge ($2 million) in environmental fines last year for gas emissions. (Bloomberg)

Kazakh officials levied a 7.4 billion tenge ($58 million) fine on China National Petroleum Corp.'s local unit for abusing its dominant position on the domestic fuel market and said they would seek to restore a $720 million penalty overturned last year on appeal. (Bloomberg)