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. Last Updated: 07/27/2016

Business in Brief

Russian Industry 'Worrying'

A dismal performance by Russian industry at the start of 2006 was partly due to a lack of competitiveness and cannot be blamed solely on an exceptionally cold spell, Deputy Economic Development and Trade Minister Andrei Klepach said on Friday.

"This fall is really worrying. It is not only the cold, it is also low competitiveness. It is a continuation of the illnesses that were in full flower last year," Klepach told reporters.

Industrial growth slowed to a mere 1 percent in February in year-on-year terms, with manufacturing -- especially carmaking -- hit hardest.

Klepach said that if the current trend continued, Russian industry would grow less than 4 percent in 2006, below an official target of 4.4 percent. (Reuters)

Investments for Diversity

Russia should attract more investments and encourage more companies to sell shares in initial public offerings to diversify the economy away from oil and gas, Prime Minister Mikhail Fradmov and Economic Development and Trade Minister German Gref said.

"We are about to face a significant slowdown in the pace of economic growth," Gref said in an address Friday. "The only way to sustain the growth is to diversify the economy away from oil and increase productivity, both of which are impossible without an increase in investments."

Fradkov said Friday that government attempts to end a dependence on oil and gas were "insufficient." (Bloomberg)

Rothschild Hires Schr?der

BERLIN -- Rothschild Group has hired former German Chancellor Gerhard Schr?der as an adviser to help its international business grow, the bank said in a statement.

Schr?der, 61, will join the bank's European Advisory Council focusing on business in Eastern Europe, Russia, Turkey and China, Rothschild said in a statement. The Social Democrat will not play a role in the bank's activities in Germany, according to the statement.

Schr?der's "extraordinary knowledge as well as his international experience and reputation" will help the bank's business grow, chairman David de Rothschild said in the statement. (Bloomberg)

Browder on Business

William Browder, chief executive officer of Hermitage Capital Management, said that Russia "is becoming a place where someone can do business," though he has been denied an entry visa since last year.

"We are in transition right now from very bad to less bad. Less bad is still bad, though, and that's where I have fallen into the trap with this visa issue," Browder said in an interview last week.

The U.S.-born Browder has been trying to return to Russia since he was turned away at Sheremetyevo Airport in November.

The decision to exclude him from Russia was not made at a senior government level, Browder said, but most likely "by some officials who work in the government, perhaps in cooperation with some other people who've decided to make my life difficult."

Browder is "quite certain" Putin will influence the decision to allow him to return. (Bloomberg)

Duma on Gambling Limits

The State Duma on Friday gave preliminary backing to new restrictions on slot machines, casinos and the exploding gambling industry.

The Duma voted 300-105 in a first reading to pass the bill, which would bar minors from entering casinos or other gambling venues, and would also remove slot machines from metro stations, streets and other locations, including schools, airports and train stations.

The bill, pushed by the United Russia party, would also set quotas for gambling operations and minimum size requirements for casinos. (AP)

$1Bln Sibneft Debt Payment

Gazprom next week will pay another $1 billion of the money it borrowed from a group of foreign banks to buy Sibneft last year, Interfax reported, citing chief financial officer Andrei Kruglov.

The payment, scheduled for Monday, will reduce Gazprom's debt to the group to $3.1 billion, from the $13 billion it borrowed to buy Sibneft, the news agency said. Gazprom owed the banks $5.1 billion at the beginning of the year, Kruglov said. (Bloomberg)

Gazprom, Eni Reach Accord

Gazprom said it reached a "preliminary accord" with Italy's Eni that would lead to cooperative ventures.

"Further development of long-term partnership relations between Gazprom and Eni has significant prospects in the frame of implementing projects," the gas monopoly said Friday in an e-mailed statement.

Earlier Friday, Eni CEO Paolo Scaroni met Gazprom counterpart Alexei Miller in Milan.

The companies agreed to another meeting next month. (Bloomberg)

Enel-Gazprom Talks

ROME -- Italy's Enel said that its chief executive and the head of gas giant Gazprom agreed in talks in Milan on Friday that both sides would keep exploring possible ways to work together on gas and energy development plans.

"During the meeting, the prospects of collaboration on a series of development initiatives in the sector of gas and electrical energy were discussed, both in Italy as well as in Russia and in third countries," Enel said. (AP)

Gazprom Expansion Abroad

Gazprom plans to expand in the United States, Europe and China by buying local companies, Interfax reported, citing company documents.

Gazprom wants to buy companies and form joint ventures to supply "end users" of gas in Western Europe, its biggest market, Interfax said, citing material to be presented by Alexander Medvedev, the head of Gazprom's export arm, at this week's board meeting. (Bloomberg)

Shell Compensates Fishery

Royal Dutch Shell's oil and gas venture on Sakhalin Island agreed to pay compensation to a second local fishing company, Calypso, for obstructing fishing nets near the town of Korsakov.

Calypso uses three stationary salmon nets in its license area, one of which had reduced catches because of port operations at a construction site.

The compensation of more than $1 million comes after Sakhalin Energy in December 2003 agreed to pay another local fishing company, Lenbok, $1.5 million because the LNG terminal was directly in its fishing license area. (Bloomberg)

Indian Bid for Udmurtneft

NEW DELHI -- Oil India plans to bid for Udmurtneft, the Business Standard reported, citing Samaresh Kumar Patra, director of exploration and development at Oil India.

The Indian company teamed up with Russia's North-Western Oil Group to make the bid, the report said. Inidia's Oil & Natural Gas Corp. will compete to buy the company in a possible tie-up with NGK Itera, the newspaper said. (Bloomberg)

Alfa on VimpelCom Buy

VimpelCom, the country's No. 2 mobile operator, is ready to buy a Ukrainian company for cash and stock from Telenor but rejects conditions attached by the Norwegian company, Alfa Group said Friday.

Alexei Reznikovich, CEO of Alfa's telecoms arm, Altimo, said Telenor's proposal that VimpelCom buy Ukrainian market leader Kyivstar for $5 billion in cash was not workable.

Telenor owns a controlling stake in Kyivstar, and has been locked in a battle for operational control of the Ukrainian company with Altimo, its junior partner.

Telenor's proposal, made on Monday, makes VimpelCom's buy of Kyivstar conditional on either it or Altimo selling out of VimpelCom, depending on which partner makes the higher offer. (Reuters)

Kazakh Engine Venture

The Kazakh's government may set up ventures with Russia to make components for helicopters, cars and trains, as the two former Soviet states seek to reduce their economic dependence on oil and gas exports.

Kazakhstan arms manufacturers may join with Russia's Kazan Helicopter Plant to assemble Mi, Ansar and Aktai helicopters, the Kazakh government said on its web site. Kazakhstan also is considering cooperating with truckmaker KamAZ and with Transmasholding, a producer of rolling stock and locomotives. (Bloomberg)

For the Record

Trubnaya Metallurgicheskaya Kompaniya, Russia's biggest pipe producer, hired Goldman Sachs and Renaissance Capital to manage an initial public offering of shares this year, Reuters reported, citing unidentified bankers. (Bloomberg)

Sistema is considering a share split to increase liquidity, Sistema spokeswoman Irina Potekhina said Friday. (Reuters)

RBC Information Systems, a media and Internet company, said net income more than doubled last year as advertising sales pushed revenue above $100 million and its 24-hour business television channel become profitable. (Bloomberg)

Turkmenistan signed a $30 million contract with U.S. heavy machine maker Caterpillar for earth-moving equipment to speed up the construction of an artificial lake, state television reported Friday. (AP)