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. Last Updated: 07/27/2016

Business in Brief

Minimum Wage May Rise

President Vladimir Putin promised to consider increasing the minimum wage, which covers one-third of the amount needed to keep a person above the poverty line, Kommersant said.

Putin promised that the government would look at the issue of the minimum wage in a meeting with Mikhail Shmakov, head of the Federation of Independent Unions, the newspaper said.

The minimum wage was raised in some Russian regions on May 1 to 1,100 rubles ($40.45) per month. It is estimated that 3,000 rubles per month is required to keep a person above the poverty line, the newspaper said. (Bloomberg)

Pipeline Firms to Merge?

The government is considering merging crude oil pipeline monopoly Transneft and refined products pipeline monopoly Transnefteproduct, Vedomosti reported Thursday.

The newspaper cited government sources as saying the move was part of a broader strategy by the Kremlin to boost control over the strategic energy sector by creating mighty state giants.

Sources also said Transneft might get control of state firm SG-Trans, which specializes in liquefied petroleum gas railway shipments.

Transneft vice president Sergei Grigoryev declined to confirm the report. (Reuters)

West Siberian Output Down

West Siberian Resources, a Russian oil producer whose shares trade in Sweden, produced 6.2 percent less oil on a daily basis in April than in March after a licensing delay stopped some production.

The Bermuda-registered oil producer pumped 17,459 barrels per day in April, it said Thursday in a statement on web site Production in March was 18,608 barrels per day.

West Siberia expects to produce 8.5 million barrels of oil in 2006, the statement said, without providing the old forecast. (Bloomberg)

Czechs Ask for Cheaper Gas

PRAGUE -- Czech Prime Minister Jiri Paroubek asked President Vladimir Putin for a 20 percent cut in prices of natural gas used for electricity production, CTK news agency said, citing Czech Deputy Environment Minister Petr Petrzilek.

Petrzilek, a member of the ruling Social Democratic Party, said a price cut had already been discussed during Putin's visit in March to the Czech Republic and that a letter with the request was on its way to Moscow, CTK reported.

Cheaper natural gas would allow the government to give up plans to build more blocks at the nuclear power station in Temelin, Petrzilek said, the agency reported. (Bloomberg)

PKN Wants Kazakh Oil

WARSAW -- PKN Orlen, Poland's largest refiner, will start seeking oil fields to buy in Kazakhstan next year, Gazeta Wyborcza reported, without saying where it got the information.

The company plans to spend $130 million by 2009 to build up its exploration business and aims to invest more once it secures the purchase of an oil field, the newspaper reported, without giving the company's total planned investment in Kazakhstan.

On Jan. 10, PKN CEO Igor Chalupec said the company might spend as much as 3 billion euros ($3.6 billion) to acquire oil fields in Russia, Eastern Europe and Iraq. (Bloomberg)

Evraz 2005 Dividends

Evraz Group, the country's leading steelmaker, will receive 3.9 billion rubles ($140 million) in 2005 dividends from West Siberian Metallurgical Plant, Interfax reported Wednesday, citing a statement by the Evraz unit.

Evraz owns 97 percent of West Siberian's shares, the news agency reported. Interfax did not give details on 2004 dividends.

The Moscow-based steel producer last week reported net income in 2005 dropped 23 percent to $905.2 million. (Bloomberg)

EU Takes Side in Meat Fight

WARSAW -- Poland can count on the European Commission's support in its fight against a Russian ban on Polish meat imports, Gazeta Wyborcza reported, citing European Trade Commissioner Peter Mandelson.

"If Russia wants to be treated as a serious and responsible member of the international trade community, it can't treat its trading partners in this way," said Mandelson in an interview with the Polish newspaper.

Russia stopped all imports of Polish meat in November after complaining of veterinary-code violations that included meat mislabeled to avoid paying higher taxes. (Bloomberg)

Golden Telecom Q1 Profit

Independent fixed-line operator Golden Telecom reported on Thursday a 6 percent decline in first-quarter net profit, which it attributed mainly to changes in accounting principles.

Net profit fell to $18.8 million from $20.0 million in the first quarter of 2005.

Revenues rose to $178.1 million from $156.5 million in the first quarter of 2005 and from $175.5 million in the fourth quarter of 2005. (Reuters)

Rostelecom Q1 Profit

Long-distance telephone company Rostelecom posted a 15 percent decline in first-quarter net profit on Thursday as costs rose following the opening of the market to competition.

Rostelcom, which had been the country's long-distance telecoms monopoly until the market was liberalized on Jan. 1, 2005, posted a first-quarter profit of 2.06 billion rubles ($75.87 million) calculated under Russian Accounting Standards.

The company said in a statement January-March revenues rose 52.3 percent from the year-earlier period to 14.6 billion rubles. (Reuters)

Advertiser to Go Public

Russia's second-largest outdoor advertising company, Gallery Group, is planning to go public, according to the company's general director, Vladislav Zakharovsky, Vedomosti reported Thursday.

The size of the IPO and other details have not been decided, Zakharovsky told the newspaper.

Baring Vostok Capital Partners and the European Bank for Reconstruction and Development respectively own approximately 40 percent and 10 percent stakes in Gallery Group, Vedomosti said, citing an unidentified source.

Gallery Group controls 5 percent of Russia's outdoor advertising market. (MT)

Neftyanoi Loses License

The Central Bank on Thursday revoked the operating license of Bank Neftyanoi, an investment arm of Concern Neftyanoi, liberal politician Boris Nemtsov had been a board member of until last year.

The bank had been shutting down its operations since February, and the Prosecutor General's Office raided its offices in December as part of a money-laundering probe.

By Thursday, the bank's staff had been cut from more than 200 people to 15, and the bank's outstanding debt had been cut to a minimum, said Bank Neftyanoi chairwoman Marina Chekurova. (MT)

Mutual Fund Investment Up

Russians are adding record amounts of money to mutual funds as stocks advance, eight years after a debt default and ruble devaluation wiped out people's savings.

Domestic investors poured 15.6 billion rubles ($573 million) into funds in the first four months of the year, almost double the amount for all of last year, according to, a web site that tracks the Russian investment industry.

The funds now have total assets of 53 billion rubles, it said.

A rising stock market is convincing more and more Russians to put some of an estimated $80 billion of savings kept at home into funds, MDM Bank chief economist Peter Westin said. (Bloomberg)

Rolf to Sell Chinese Autos

Russia's largest foreign car dealer, Rolf, is in talks with Chinese carmakers that are underrepresented in Russia, a company spokesman said Wednesday.

"We wouldn't like to work with the companies that are well represented in the Russian market," Rolf spokesman Valery Tarakanov said.

The company's CEO, Matt Donnelly, said earlier this week that Rolf was looking at a shortlist of four Chinese carmakers. Donnelly said Wednesday that Rolf would consider all Chinese carmakers once they had improved the quality of their product in a few years' time.

"We are not saying no to anyone," he said.

Some 12,000 Chinese-made cars were sold in Russia last year, according to estimates by PricewaterhouseCooper. (MT)