MOSCOW - The two contracts of Russian oil major Tatneft in Iraq have been suspended due to the military actions there, the company’s press service said Friday.

Tatneft is based in the constituent republic of Tatarstan.

Tatneft was working with Russian oil company Zarubezhneft to drill 45 oil wells and with Iraq’s Northern Oil Company to drill 33 wells under the terms of the UN sanctions.

Tatneft started to carry out its contract with Zarubezhneft in autumn 2002, and has drilled one well and started drilling another one.

Currently, due to the war the two contracts have been suspended and Tatneft’s 16 employees in Iraq have been evacuated to Russia.

The only equipment left by Tatneft is a drill unit, which was leased from Zarubezhneft.

Earlier Tatneft denied media reports that it has lost U.S. $1 billion in Iraqi contracts due to the war. /Prime-Tass/
 

MOSCOW - Russia's Nizhny Novgorod region will borrow funds from the government and Sberbank (SBER.RTS) to service its $119.372 million Eurobond, a local official said on Monday.

The central Russian region placed a $100 million Eurobond in 1997, but had to restructure the paper following Russia's 1998 debt crisis that crippled many borrowers.

Under the terms of the restructuring, the region is to pay interest in full in 2003-2005. The repayment of the principal of the debt and the remainder of the interest should also be done in 2003-2005 in equal portions.

The region's finance ministry said in a statement that it had agreed to borrow 700 million roubles ($22 million) from Sberbank and 200 million roubles from the federal government to make the payment which came due last Friday.

The restructuring deal allows for a one-week grace period.

"If no payment goes through, it will only be due to technical problems. We have reached agreement on the financing and we expect to honour our obligations," a Nizhny Novgorod finance official told Reuters.

He added that the credit agreements would be signed on Tuesday.

The Sberbank loan is a three-year credit, while the government provided the funds for six months, the statement said.

The region is to pay 811.7 million roubles in principal and pay 177.6 million roubles of interest on the bond. ($=31.2798 roubles). /Reuters/
 

MOSCOW - The pretax profit of Russia’s largest steel smelter Magnitogorsk Metallurgy Plant (MMK) rose U.S. $12 million on the year in 2002 to $95 million, as calculated under International Accounting Standards (IAS), the company’s press service reported Friday.

The press service also said that the company’s pretax profit is expected to total $168 million in 2003, $179 million in 2004 and $127 million in 2005.

The net profit of MMK rose to 6.858 billion rubles in 2002 from 6.512 billion rubles in 2001 as calculated under Russian Accounting Standards (RAS), while its sales revenues amounted to 60.5 billion rubles, up from 47.4 billion rubles in 2001.

The company’s IAS financials are currently being audited by the KPMG company.

MMK plans to release its latest audited financial results for last year at the beginning of May.

MMK exports its products to Southeast Asia, the Middle East, Africa, Eastern Europe and other CIS countries (the largest MMK production importers in the CIS are Belarus, Ukraine and Kazakhstan), as well as to the United States, Canada, Finland, and Italy. (31.2908 rubles - U.S. $1) /Prime-Tass/
 

UFA - Russia’s Uralsib bank plans to sell 5-15% of its shares to foreign investors by the end of this year, the bank’s President Azat Kurmanayev said at a briefing Friday.

He did not elaborate on the possible sale terms.

He also said the bank plans to issue Eurobonds in the third quarter of 2003 but did not provide any other details.

The bank’s CEO Alexander Khasanov said the bank does not plan to issue American Depositary Receipts (ADRs) at the moment.

Kurmanaev said the Uralsib banking group’s net assets will double to U.S.$4 billion by 2004 due to the acquisition of new banks and by increasing the capitalization of Uralsib’s member banks.

Uralsib bank is located in Ufa and was set up in 1993.

Its charter capital stands at 5.7 billion rubles.

The Uralsib banking group incorporates 17 affiliates and seven subsidiaries and has 300 branches in 65 Russian cities.

The banking group serves about 1 million individuals and 65,000 entities. (31.2908 rubles -U.S.$1) /Prime-Tass/
 

KALININGRAD - A delegation from the Swedish province of Blekinge will arrive in the Kaliningrad Region tomorrow. According to the regional administration's press office, the delegation will meet with Governor Vladimir Yegorov tomorrow and the two parties will sign an agreement and protocol on cooperation between the two regions.

The Kaliningrad Region already has positive experience of working with Blekinge, and in 1999 the Russian town of Slavsk and the Swedish town of Ronneby were twinned. In 2001 a project to develop industry and trade began, as a result of which several Swedish companies were set up in Slavsk. In 2002 a decision was taken to implement a large-scale project called the Slavsk Industrial Zone, the aim of which is to create a technology park to act as an incubator for high-technology firms. Swedish and Kaliningrad experts hope to use the technology park to increase investment in the region's economy, and raise the economic potential of all the region's municipal districts to the same level.

Implementation of the Slavsk Industrial Zone project is to begin this year. Two modern production modules are planned to be built on a 6-hectare plot in Slavsk. Each will have an area of 5,000 square metres. The construction will be jointly financed on an equal basis by the Russian and Swedish sides. The first module will then be given to two Swedish companies, Markisol and HGL, on long-term leases. The project is being coordinated by the Baltic Institute in Karlskrone.

The new stage in partnership between the two regions will also include several other projects, for example 'Environmental planning in the Kaliningrad Region' and SEBTrans - Link, a model transport link for the Baltic Sea region. /Rosbalt/
 

MOSCOW - Russia's largest steel smelter the Magnitogorsk Metallurgy Plant (MMK) plans to increase its 2002 dividend payments by 20% compared with 2001, a member of MMK’s board of directors and Head of Department in the Property Relations Ministry, Alexander Borodin, said Friday.

MMK paid 2001 dividends of 10.16 rubles per share with a face value of one ruble.

According to preliminary estimates, MMK’s 2002 net profit totaled 6.858 million rubles, up from 6.512 million rubles in 2001. (31.2908 rubles - U.S.$1) /Prime-Tass/
 

MILAN - An international conference entitled 'Russia - Italy: industrial and investment cooperation' has opened in Milan today. The press office of the Russian Ministry for Anti-Monopoly Policy and Business Support told Rosbalt that the event is being organised by the Russian Union of Industrialists and Entrepreneurs and the Confederation of Italian Industry. The conference will end on April 9.

The Anti-Monopoly Ministry stressed that the conference aimed to develop further cooperation between Russia and the EU, and increase the clout of Russian business among foreign business people. The conference will feature discussions on developing small and medium-sized business in Russia using Italian experience. /Rosbalt/
 

MOSCOW - Mikhail Khodorkovky, head of Russia's oil firm YUKOS (YUKO.RTS) and one of the country's richest men, told a Russian daily on Friday he planned to step down from his post in 2007, when his contract is due to expire.

"After (the contract expires) I will leave the post of chairman. I work five days a week and ten hours a day and I don't want to do the same when I'm 45. I will have a rest," Khodorkovky told Vedomosti newspaper.

In addition to his position as YUKOS's chairman, Khodorkovsky is the largest shareholder of Group Menatep, which owns 61 percent in YUKOS, Russia's No 2 oil producer and one of the country's fastest growing oil firms.

Khodorkovsky directly owns 9.5 percent of Group Menatep shares and is a sole beneficiary of a special trust holding a further 50 percent, which means Khodorkovsky owns directly and indirectly over 36 percent in YUKOS.

YUKOS's market capitalisation stands close to $22 billion, which means Khodorkovsky controls shares worth some $8 billion.

Analysts said Khodorkovsky could try to follow the example of other Russian businessmen and seek a political role.

"This announcement will do nothing to quell the ongoing rumours that Khodorokovsky will seek a political role after his success at turning YUKOS around," said United Financial Group.

Aton brokerage said the report was further proof of a growing tendency among core shareholders in Russia's largest companies to hand over operating control to management.

"With his substantial shareholding in YUKOS, however, even if Khodorkovsky delivers on his promise he is likely to retain much of his influence over key company decisions," said Aton. /Reuters/
 

MOSCOW - Russia's state oil firm Rosneft said on Friday it had made a generous cash bid for the shares of Anglo-Siberian, offering to pay $72 million for the oil firm with important reserves in Western Siberia.

The news is likely to shock French oil major TotalFinaElf (TOTF.PA), which has been negotiating a deal to develop Anglo-Siberian's giant Vankor field for more than a year. The field has oil reserves close to one billion barrels.

TotalFinaElf declined to comment.

Anglo Siberian said it had advised its shareholders against taking any action on Rosneft's offer while its board evaluated the bid.

Rosneft said in a statement the offer of 100 pence per share valued the existing issued share capital of Anglo Siberian at approximately 46.3 million pounds ($72.55 million).

The offer represents a 100 percent premium over the closing price of 50 pence for an Anglo Siberian share on April 2.

Anglo Siberian's stock closed nearly 57 percent up at 95-1/2 pence on Friday, off the day's high of 97.38p.

Rosneft said it had received letters of intent to accept the offer from the holders of 41.1 percent of Anglo-Siberian, including from Lynminster Ltd, which holds 29.9 percent, and from institutional shareholders with 11.2 percent.

"This proposed acquisition is in line with our strategy of building a quality reserve base in Russia and the CIS," the statement quoted Rosneft's head Sergei Bogdanchikov as saying. Rosneft is the eighth-largest oil firm in Russia and the last big state oil firm in the country. It produces 320,000 barrels per day, but has said it wants to more than double its output on the back of recent aggressive acquisitions of oil reserves.

"The significant premium represents more than fair value for any potential upside in Anglo-Siberian's asset base, given the group's lack of progress to date in exploiting its assets", Bogdanchikov said.

TOTAL LIKELY OUT

Anglo-Siberian is exploring two fields in the Krasnoyarsk region in western Siberia. The firm owns 59 percent of Yeniseyneft, a Russian-based entity which in turn holds the licence for the Vankor field.

Aton brokerage said the field's estimated recoverable reserves were 905 million barrels of oil and 73 billion cubic meters of gas. Anglo-Siberian also fully owns the North Vankor licence, with recoverable reserves of 274 million barrels.

Anglo-Siberian was in talks with TotalFinaElf, which wanted to acquire a 52 percent stake in Yeniseyneft for $27 million and an option for Anglo-Siberian's 60 percent in the North Vankor licence.

According to Anglo-Siberian estimates the Vankor appraisal program would cost as much as $100 million while the development and infrastructure bill could amount to $2.4 billion.

"The recent news about the possible cancellation of production sharing status on many Russian fields (including Vankor) could lead to delays in the partnership with TotalFinaElf," said Aton.

The Russian government said this week only five production sharing deals would survive, while the remaining 30 projects, previously earmarked for production sharing, should be developed on a regular tax regime.

"Rosneft appears a completely suitable partner, as it would agree to develop the field under the national tax regime", said Aton. /Reuters/
 

MOSCOW - The car sales of the French vehicle producer Citroen via its official dealers in Russia increased 36% on the year in the first quarter to 499 cars, an official with the company’s Moscow office told Prime-Tass Thursday.

Citroen’s most popular models on the Russian market in January-March were the C5, with 176 sales, and the C3, 166 sales.

Citroen models sold on the Russian market also include the Citroen Xsara, Xsara Picasso, Berlingo and Jumper.

In 2002, Citroen’s car sales in Russia were at 2,272 cars, up 130% on the year. /Prime-Tass/