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. Last Updated: 07/27/2016

Business in Brief

Kudrin: State Debt Will Rise

Finance Minister Alexei Kudrin said the country's state debt, denominated in rubles, will begin rising in 2007 for the first time since at least 2002 as Russia borrows more domestically to avoid spending oil funds.

The debt will rise to 2.9 trillion rubles ($104.7 billion) in 2007 from 2.7 trillion rubles in 2006, and to 3.3 trillion rubles in 2009, Kudrin said Tuesday at a press briefing in Moscow. (Bloomberg)

Sakhalin-2 EBRD Loans

TOKYO -- Royal Dutch Shell's $20 billion Far Eastern natural gas venture may win environmental approval for European Union-backed loans by May, helping to advance financing from other lenders, bankers said.

Public hearings by the European Bank for Reconstruction and Development probably will not delay a positive environmental assessment for loans to the Sakahlin-2 project, Mark King, the EBRD's head of environmental policy, said yesterday at a meeting in Sapporo, Japan. Approval may precede any Russian government decision to accept a doubling of the project's development costs. (Bloomberg)

Baikal Pipeline Bill

State Duma lawmakers are planning to strike amendments from a bill that would stop an oil pipeline from being built near Lake Baikal, the world's largest reservoir of fresh water, Vedomosti reported.

The Duma, controlled by the pro-Kremlin United Russia party, will revote on a draft of the Water Code that passed with amendments prohibiting construction near the lake's shores, the newspaper said. (Bloomberg)

Balkans Pipeline Plans

BUDAPEST, Hungary -- Serbia and Bulgaria plan to build a $120 million natural-gas pipeline this year to connect the two country's networks and improve Serbia's supply of the fuel, ministry officials said.

The pipeline, stretching for 201 kilometers, would bring 1.5 billion cubic meters of Russian gas each year to Nis, southeast Serbia, from Dupnica, in Bulgaria, Veneta Tzvetkova, head of the energy market department with the Bulgarian Ministry of Economy and Energy, said by telephone today. (Bloomberg)

Belarus Customs Duties

Russia wants Belarus to share customs duties on the oil products it refines and exports, Kommersant reported, citing an unidentified person familiar with the situation.

Russia, which supplied Belarus with 19.2 million tons (386,000 barrels per day) of crude last year, is basing its claim on a 1995 customs union between the two countries, Kommersant said Tuesday. Belarus pumped 1.8 million tons of crude and exported 13.5 million tons of refined products last year, the paper said. (Bloomberg)

Mosenergo Share Issue

Mosenergo said on Tuesday that the board of its parent company, Unified Energy Systems, would discuss in May or June its plans for an additional share issue worth up to $750 million.

Company head Anatoly Koptsov told reporters that Mosenergo was planning the additional share issue for February or March 2007. (Reuters)

Finns Fear Export Cable

HELSINKI / OSLO -- A plan by Russia's nuclear power industry to build a new export cable to Finland has won backing from energy-hungry industry, but the Finnish grid warned on Monday that it would lead to blackouts for Finns.

United Power Oy, a firm owned by Russian energy group Baltenergo, asked Finland in 2004 for a permit to build the 1,000-megawatt link from Kernovo, near the aging Sosnovyi Bor nuclear plant, beneath the Gulf of Finland to near the Finnish port of Kotka by 2009.

"The power system in the St. Petersburg region is already now operating at its maximum," Timo Toivonen, chief executive of Finland's power grid Fingrid, told a news conference. (Reuters)

Heavy Machinery Tariffs

Russia will remove import tariffs on heavy machinery, Vedomosti reported, citing a copy of customs plans for the next three years.

The budget committee will discuss the plans during a meeting today with Prime Minister Mikhail Fradkov, Vedomosti said. (Bloomberg)

DaimlerChrysler-GAZ Plans

DaimlerChrysler may sell truck chassis to billionaire Oleg Deripaska's GAZ, Vedomosti reported, citing Maxim Avdeyev, chief executive of Deripaska's RusPromAvto holding company.

GAZ plans to buy as many as 25,000 DaimlerChrysler chassis with a payload of 1 ton, Vedomosti said. The companies may sign a supply contract as early as this month, the newspaper said.

Russians buy between 30,000 and 50,000 light commercial vehicles per year and GAZ wants half the market, board chairman Alexander Yushkevich said, Vedomosti reported. (Bloomberg)

Gazprombank Purchase

ST. PETERSBURG -- German-based Dresdner Bank's purchase of one-third of Russia's No. 3 bank, Gazprombank, for $800 million will be completed in the first half of 2006, Gazprombank deputy chairman Alexei Obozintsev said on Tuesday.

Obozintsev told reporters that an IPO of Gazprombank's shares could take place in the first half of 2007. He gave no details. (Reuters)

Gazprombank $500M Loan

LONDON -- Gazprombank, the bank owned by Gazprom, got a $500 million loan at the lowest rate paid by a Russian financial institution, according to a statement e-mailed by ABN Amro.

The three-year loan was arranged by ABN Amro along with Bank of Tokyo-Mitsubishi UFJ, Sumitomo Mitsui and 22 other international banks, ABN Amro said in the statement.

The loan pays 50 basis points, or 0.5 percentage point, per year over interbank lending rates, the statement said. (Bloomberg)

Google Moscow Center

Google, the most-used Internet search engine, will open a research and development center in Moscow and hire Russian programmers to develop products for the global market, Vedomosti said, citing the company.

The center will open by the end of the year and be run by Sergei Burkov, who established U.S.-based encoder Invincible Data Systems, the newspaper said. U.S. technology companies Intel and Motorola already have similar centers in Moscow. (Bloomberg)

Phone Subscriptions Rise

Mobile-phone companies in Russia added 1.6 percent more subscriptions in March to boost their combined domestic total to 132.07 million users, an industry researcher said.

MegaFon, the country's third-biggest wireless operator, posted the fastest growth, raising its subscriber numbers in Russia 2.4 percent to 24.1 million in March, Advanced Communications & Media, a Moscow-based company that compiles data on the industry, said in an e-mailed statement Tuesday. (Bloomberg)

Sistema, Alfa Eye Armentel

ATHENS --Sistema and Alfa Group are interested in buying Armentel, the fixed-line and mobile-phone company in Armenia, Greek newspaper Kathimerini reported, without citing anyone.

Sistema has officially confirmed interest in acquiring Armentel from Hellenic Telecommunications Organization, the newspaper said today. Hellenic Telecom said April 4 it planned to sell the unit, which it acquired in 1998. (Bloomberg)

Danish Forestry Maker

Mikhail Bolotin's company Most bought Danish forestry equipment producer Silvatec for 10 million euros ($12.1 million), Vedomosti reported, citing Bolotin.

Bolotin's Most is a holding company for mechanical engineering assets, including Traktorniye Zavody, a tractor producer that generated 2005 sales of 23.8 billion rubles ($860 million), the newspaper reported.

Traktorniye Zavody controls companies including Promtraktor, Vladimir Traktorny Zavod, Lipetsky Traktor and Kurganmashzavod, Vedomosti said. (Bloomberg)

Highway Project Bidding

LONDON -- Balfour Beatty and Jarvis have been asked by Russia to consider bidding for one of the country's first Public Private Partnership projects, the London-based Times said.

Balfour Beatty and Jarvis have been approached about submitting bids to Ernst & Young, which has been selected to run an auction in connection with an 8 billion-pound ($4 billion) contract to build a high-speed motorway, the newspaper said. (Bloomberg)