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. Last Updated: 07/27/2016

Business in Brief

Gazprom's Value Surges

President Vladimir Putin now controls the world's second-biggest energy company by market value, as shares of state-run Gazprom surged to a record, making the company worth more than BP.

Gazprom stock rose 7.7 percent, the biggest gain since Jan. 10, to $11.20 in late afternoon trading Tuesday, after its weighting was raised in the MSCI Emerging Markets Index.

At $265 billion, Gazprom is the world's fourth-biggest publicly traded company, after ExxonMobil, General Electric and Microsoft. (Bloomberg)

Gazprom MSCI Weighting

Gazprom will have its weighting raised sixfold in the MSCI Emerging Markets Index starting June 1, after the company's shares became accessible to more investors.

Gazprom's weighting will be increased to 2.5 percent from the current 0.4 percent in the Emerging Markets Index and to 29 percent from 5.9 percent in the MSCI Russia Index after the close of trading May 31, the MSCI said in a statement. (Bloomberg)

Gazprom Manager Options

Gazprom wants to give its top executives stock options for the first time, Vedomosti reported Wednesday.

Gazprom's board on Thursday will decide on the option for 0.02 percent of shares, or $49 million at current prices, the newspaper said, citing an internal company document.

Vedomosti said the option would allow the company's top 76 executives to pay $8.80 per share in three years, a 17 percent discount on Wednesday's price. The number of shares available to managers would be based on their salaries, the paper said.

Last year, a proposal for a stock-option program was rejected, Vedomosti said. (Bloomberg)

Sakhalin Marketing Pact

Gazprom expects to reach an agreement this year with ExxonMobil on marketing fuel from Sakhalin.

The ExxonMobil-led Sakhalin-1 venture began pumping oil last October. The partners, which include Rosneft and India's Oil & Natural Gas Corp., need to find a market for their gas to raise crude extraction.

Gazprom is examining plans either to sell Sakhalin-1 gas domestically, liquefying it at a nearby plant being built by a Royal Dutch Shell-led group, or to export the fuel through a pipeline to China.

"We are in dialog with ExxonMobil about possible options for marketing gas" from Sakhalin-1, Gazprom deputy chief executive Alexander Medvedev, said Wednesday in an interview in London. (Bloomberg)

Russian to Head CPC

The Chevron-led Caspian Pipeline Consortium has voted to appoint an executive from state oil firm Zarubezhneft as its general director, CPC said in a statement on Wednesday.

CPC's new general director, Vladimir Razdukhov, has worked as deputy head of Zarubezhneft, the statement said.

He will become the first representative of the Russian state to head the consortium running the pipeline, which ships crude from Kazakhstan to Russia's Black Sea coast. (Reuters)

Udmurtneft to Pay Dividend

TNK-BP's oil unit Udmurtneft will pay a $613 million dividend to its shareholders, including oil major BP, before its selloff in the next few months, the unit said Wednesday.

Udmurtneft said in disclosure documents that its board had recommended a dividend of 4,246.5 ($155) rubles for common and preferred shares for 2005 and 470.7 rubles for the first quarter of 2006. This will translate into a total dividend of $613 million, the largest ever paid by the unit.

No trades were registered in Udmurtneft's very illiquid stock after Wednesday. (Reuters)

Black Sea Pipeline

ISTANBUL -- Eni and its Turkish partner, Calik Group, have won a $1 billion contract to build a pipeline to carry Russian and Caspian crude oil from the Black Sea to the Mediterranean, Sabah reported.

The pipeline, which will run the 700 kilometers between the Black Sea port of Samsun and the Mediterranean town of Ceyhan, is expected to have an annual capacity of 191 million tons, Sabah said. Work is to begin within six months. The pipeline aims to relieve shipping traffic through Turkey's Bosporus and Dardanelles, the only sea link for Russian and Caspian oil to the world's oceans. (Bloomberg)

LPG Port on Baltic Coast

Novatek and Sibur, a petrochemical unit of Gazprom, are examining plans to build a liquefied petroleum gas port on the Baltic Sea coast.

The port will be able to export 1 million tons of LPG per year from Ust-Luga in the Leningrad region, Novatek chief financial officer Mark Gyetvay said Tuesday in London.

"The working group is looking at the economic feasibility of the plant, loading and storage facilities there," Gyetvay said. He declined to provide any estimates for the project costs.

Novatek produces about 400,000 tons of LPG per year, Gyetvay said. (Bloomberg)

Novolipetsk Q1 Output Up

Novolipetsk said Wednesday that first-quarter production rose 4.4 percent.

Production rose to 2.29 million tons, from 2.19 million tons in the first quarter of 2005, the company said in a statement. Pig-iron output increased 4.0 percent to 2.20 million tons.

"Despite a slight fall in prices at the beginning of the year, we continue to maintain a stable outlook for the global steel market," Novolipetsk spokesman Anton Bazulev said. (Bloomberg)

Telenor-Alfa Breakthrough

Telenor said Wednesday that Alfa Group had agreed to a key condition in a $5 billion deal to allow the companies to unwind their investments in Russian and Ukrainian telecoms firms.

Alfa Group and Telenor are major shareholders in VimpelCom and Ukrainian cell phone firm Kyivstar but have clashed over the best way for VimpelCom to expand in Ukraine.

Under the deal, which was proposed by Telenor, VimpelCom would buy Kyivstar for $5 billion in cash.

Telenor wants the deal to include a clause allowing it or Alfa to buy the other out of VimpelCom after it takes over Kyivstar. This was opposed by Alfa.

Telenor said it had held talks with Alfa's telecoms arm, Altimo, which had since changed its mind and was willing to include the "separation" clause in the deal. (Reuters)

Transaero IPO in 2007

Transaero, one of the country's top five airlines, said Wednesday that it aimed to raise not less than $250 million in the fall of 2007, floating 15 percent to 18 percent of its stock in an initial public offering in Russia.

"We will definitely hold an IPO in fall 2007," Transaero general director Olga Pleshakova told reporters. "I believe the [issue] volume will be no less than $250 million."

She said the IPO plan had already received the backing of Transaero's board of directors and that a general meeting of the company's shareholders would discuss the issue on May 27. (Reuters)

Georgian Water Concerns

The Federal Consumer Protection Service has uncovered shipments of Georgian mineral water without proper health safety documents, and found that information on some bottle labels did not reflect the water content, according to a letter by chief epidemiologist Gennady Onishchenko.

The letter, posted on the service's web site on Wednesday, draws attention to Georgia's Borzhomi and Nabeglavi waters.

Also Wednesday, the Foreign Ministry chided Georgian Defense Minister Irakly Okurashvili for suggesting that Russia had no taste in wine.

Georgian winemakers sent the wine that they could not sell in Europe to Russia, Okurashvili said Monday, because "in Russia, I beg your pardon, even fecal matter would sell," Interfax reported.

"I believe that these types of statements are not becoming of responsible, thinking politicians," Deputy Foreign Minister Grigory Karasin said, Interfax reported Wednesday. Russia banned wine imports from Moldova and Georgia on March 27. (MT)

For the Record

Cherkizovsky, one of the country's largest meat factories, has set the price range for its initial public offering at $14.75 to 20.25 per Global Depositary Receipt, AK&M news agency reported Wednesday. (Reuters)

Sedmoi Kontinent on Wednesday reported a 109 percent rise in first-quarter net profit to $19.8 million. The company said in a statement that net revenue rose to $223.2 million, up 37 percent from the same period last year. Figures are to international accounting standards. (Reuters)