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. Last Updated: 07/27/2016

Business in Brief

IMF Warns of Ruble Rise

Russia has little chance of meeting its 2006 inflation target if budget spending continues to rise, unless it allows further ruble strengthening, the International Monetary Fund said Monday.

Consumer prices spiked 5 percent in the first quarter of 2006, a heavy blow to hopes of Russia achieving its annual inflation target of 8.5 percent to 9.0 percent. But price growth slowed in the second quarter after the Central Bank allowed the ruble to rise in nominal terms.

"If there is a further notable fiscal relaxation, it is difficult for me to see how the Central Bank could achieve 8.5 percent inflation without allowing more ruble appreciation," the head of a visiting IMF mission in Moscow, Poul Thomsen, told a news conference. (Reuters)

Economy Will Grow 6.5%

The country's economy will probably expand 6.5 percent this year, Interfax said, citing the International Monetary Fund at a press conference in Moscow on Monday.

That would be faster than the original government forecast of 6.1 percent and a revised forecast of 6.4 percent announced last month by Economic Development and Trade Minister German Gref. (Bloomberg)

Tatneft H1 Profit Up 69%

Tatneft, the country's seventh-largest oil producer, said profit jumped 69 percent in the first half of 2005 as sales rose.

Net income was $551 million, versus $327 million in the same period a year earlier, Tatneft said in a statement Monday. Sales jumped 65 percent to $4.84 billion, the company said.

Tatneft, based in Almetyevsk, Tatarstan, also said net income in 2004 was $843.6 million, 67 percent more than a year earlier. Sales in the period rose 41 percent to $7.45 billion. (Bloomberg)

Gazprom Considers Iran JVs

Natural gas behemoth Gazprom said Monday that it was considering joint oil and gas projects with Iran's state energy companies.

Gazprom chief executive officer Alexei Miller met Monday with Iranian Deputy Oil Minister M.H. Nejad Hosseinian to discuss creating a joint venture to explore and develop oil and gas fields, and to transport and sell natural gas, the company said in a statement.

Despite international concerns over Iran's nuclear program, Russia has close business ties with Iran. (AP)

LUKoil Bids in Iran

TEHRAN, Iran -- LUKoil is among the companies that have requested tender documents to develop phases of Iran's South Pars natural gas field, the Iran Daily said. Italy's Eni, Norway's Statoil and Australia's BHP Billiton are also among the bidders, the daily said.

State-owned National Iranian Oil on March 1 invited international contractors to develop phases 19, 20, 21 and 22 of South Pars, the world's largest natural-gas deposit. The four phases are expected to produce 100 million cubic meters of gas per day for Iran's domestic network. (Bloomberg)

LUKoil Eyes Serbia Refinery

BUDAPEST, Hungary -- LUKoil reiterated its interest in buying Serbian refiner Nafta Industrija Srbije during talks with the country's Economy Ministry last week, the Serbian government said. LUKoil executives visited Serbia for talks on the sale of Nafta with Serbian Economy Minister Predrag Bubalo on June 23, the ministry said in a statement, without giving further details.

Nafta, with refineries in Pancevo and Novi Sad and a capacity of 167,264 barrels per day, would allow LUKoil a foothold in the Balkans, where economies and fuel use are growing faster than in Western Europe. (Bloomberg)

Sakhalin Offshore Platform

Sakhalin Energy Investment, a Royal Dutch Shell-led venture in the Far East, installed the country's first offshore natural gas platform.

The platform will be the main source for Russia's first liquefied natural gas plant on Sakhalin Island, the company said in an e-mailed statement Monday.

The 22,000-ton gas platform was towed from a construction yard in South Korea to the Sakhalin-2 development in the Sea of Okhotsk, the company said. The project is scheduled to start producing LNG in 2008. (Bloomberg)

Naftogaz Seeks $1Bln Loan

KIEV -- Ukrainian state oil company Naftogaz Ukrainy wants to get a $1 billion loan from the government to pay its debt to its supplier and to buy more natural gas for storage, the on-line newspaper Ukrainska Pravda reported, citing the company's first deputy chief executive officer, Ivan Vasyunyk.

Using the loan to pay the debt would mean the supplier, RosUkrEnergo, would have no reason to reduce gas shipments to Ukraine, Vasyunyk said, Ukrainska Pravda reported.

Naftogaz said it would also get a $500 million loan from ABN Amro by the end of June, the newspaper reported, citing Vasyunyk. (Bloomberg)

Arms Orders to Hit $11Bln

Russia will increase defense spending on weapons by 27 percent next year, to more than $11.1 billion, RIA-Novosti said, citing Defense Minister Sergei Ivanov.

Weapons orders, not including logistics, will grow to more than 300 billion rubles ($11.1 billion) in 2007, up from 237 billion rubles this year, the news agency cited Ivanov as saying.

The government has amassed more than $300 billion in savings in eight years. (Bloomberg)

Rostelecom Move to St. Pete

Rostelecom, the country's dominant long-distance telephone provider, will move its tax address to St. Petersburg, following other state-run companies in giving President Vladimir Putin's hometown a financial boost.

The move from Moscow to St. Petersburg is stipulated in a new company charter that the government and other shareholders approved two days ago, Rostelecom spokesman Anton Klimenko said by telephone Monday.

Rostelecom will officially register in St. Petersburg by the end of the year, Klimenko said. He declined to say how many employees Rostelecom would have in St. Petersburg or how much tax it expects to contribute to the city budget. (Bloomberg)

More Non-Russians for GAZ

GAZ, a car and truck manufacturer controlled by billionaire Oleg Deripaska, will hire more non-Russians for senior positions, Vedomosti reported, citing a company spokeswoman.

David Eggers, a former executive at Ford, will join GAZ as financial director on June 29, the newspaper said, citing Yelena Matveyevna, a spokeswoman for Russkiye Mashiny, the company though which Deripaska controls GAZ.

GAZ is also in talks with seven American DaimlerChrysler executives, including the production manager of the Sterling Heights, Michigan, plant. The DaimlerChrysler team will assist in the installation of equipment bought from the German carmaker and will train GAZ workers, the newspaper said, citing Matveyevna. (Bloomberg)

New Building Regulations

Moscow developers will be forced to delay the sale of 15 percent of the floor space of residential buildings until construction is completed, Interfax reported, citing a source in City Hall.

According to the source, the regulation has already been signed by Deputy Mayor Vladimir Resin as an additional guarantee for private individuals investing in unfinished apartment buildings. (MT)

Abkhazia Property Threat

Georgian Foreign Minister Gela Bezhuashvili has said that the acquisition of private property in Abkhazia by Russian citizens and companies would be contested in European courts.

"The sale to Russian citizens and Russian companies of private property, … will unquestionably become the subject of disputes in European courts," Bezhuashvili told journalists on Wednesday, Interfax reported.

Georgian President Mikheil Saakashvili has repeatedly said that property in Abkhazia that is sold to Russians by the authorities of the breakaway region would be confiscated. (MT)

$50M Office Project

A Moscow company is planning on investing $50 million in 46,000 square meters of office space on two industrial sites near the Dubrovka metro station, newspaper Biznes reported last week, citing the general director Domion-M.

The sites are located on 1st Dubrovsky and Sharikopodshipnikovsky streets. (MT)

For the Record

Deputy Mayor Vladimir Resin said Saturday that 550,000 square meters of apartments would be built on a former industrial site on Okskaya Street, in southeast Moscow, Interfax reported. (MT)

Russian hotel chain Heliopark officially opened its first business hotel in Moscow on Wednesday, a 33-room property on 1st Brestskaya Street, near the Tchaikovsky Concert Hall. (MT)

Moscow Mayor Yury Luzhkov last week opened the first phase of the Moskva residential development in Ulan-Bator, Mongolia, Interfax reported. (MT)