Business in Brief

November Refining High

Russian refining rose to an all-time high in November 2005, as record high crude oil export duties prompted oil firms to send more volumes to domestic processing, Industry and Energy Ministry data showed on Monday.

The data showed Russian refineries processed 4.37 barrels per day in November, up from the previous highs of 4.24 bpd in October and 4.25 bpd in September.

Fuel oil and gas oil accounted for most of the increase, since production of higher-value light products such as gasoline was already close to capacity. Refiners will need to invest in costly upgrades to boost production of the higher-quality fuels. (Reuters)

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S&P Ups Gazprom Rating

Gazprom's credit rating has been raised by Standard & Poor's following the $7 billion purchase of the company's treasury stock by state-owned oil company Rosneft, the ratings company said in a report Monday.

S&P increased its long-term corporate credit ratings for Gazprom to BB+, one level below investment grade, from BB. The ratings company said it may raise Gazprom's ratings again.

"The rating upgrade reflects the cash payment from Rosneftegas, which, together with higher export prices, has allowed Gazprom to limit increases in the year-end parent debt," analysts at the ratings company wrote in the report. (Bloomberg)

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Banks for Shtokman

Gazprom has shortlisted BNP Paribas, Calyon and HSBC Holdings to advise it on selecting partners for the Shtokman liquefied natural gas project, Project Finance International reported, without saying were it got the information.

Gazprom wants to decide by the end of March which companies will participate, said the magazine, which covers energy and infrastructure financing.

Gazprom in September said it would choose two or three partners for Shtokman from Chevron, ConocoPhillips, Norsk Hydro, Statoil and Total.

The project has the potential to produce 45 million tons per year of LNG, with the first phase to produce 15 million tons, the report said. (Bloomberg)

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LUKoil Shares Hit Record

Shares in oil firm LUKoil broke through 2,000 rubles and $70 for the first time on Monday after management unveiled solid quarterly results and promised a big announcement.

LUKoil's dollar shares were trading at a record $71.05, 5.8 percent up on the day, by late afternoon Monday, while the ruble shares were up 5 percent at 2,016 rubles.

The record highs follow the release of LUKoil's U.S. generally accepted accounting principles results for the third quarter of 2005 on Friday, which analysts said were its best ever. (Reuters)

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Oil Shipments to China

Russia exported more than 7.6 million tons of crude oil (153,000 barrels per day) by rail to China in 2005, 34 percent more than in 2004, and met its revised target of 7 million to 8 million tons, Russian Railways said on Monday.

Russian Railways earlier cut its forecast for oil exports to China in 2005 to 7 million to 8 million tons (141,000 bpd to 161,000 bpd) from an initially scheduled 10 million tons.

The key crude oil exporter to China in 2005 was state oil firm Rosneft, helped by its acquisition of the main unit of the stricken oil firm Yukos.

But LUKoil, the second-largest crude oil exporter to China, halted shipments from July this year because the route became too expensive. (Reuters)

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Novorossiisk Cuts Exports

Russia will cut crude exports via its main Black Sea port of Novorossiisk to 864,000 barrels per day in February from its usual 920,000 bpd to 950,000 bpd due to shipping delays in January, trading sources said on Monday.

The port, which has repeatedly closed over the past month due to bad weather and is also suffering delays in tankers' arrival due to problems on the Bosphorus, is scheduled to load 3.3 million tons (864,000 bpd) in February.

It will also load some additional 285,000 tons of crude, which were delayed from January and would push its total loadings up to 3.585 million tons (939,000 bpd). (Reuters)

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Surgutneftegaz Tender

LONDON -- Surgutneftegaz has issued a sell tender for an early-February loading of Urals crude, traders said on Monday.

The tender, which closes and should be awarded on Tuesday, is for 1 million-barrel cargo for Feb. 6-7 loading out of Russia's main Black Sea port of Novorossiisk. Surgut's most recent tender for a Black Sea cargo was awarded almost a month ago to Europetroleum. (Reuters)

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Aeroflot Cuts Alcohol

Aeroflot will no longer serve free drinks in the economy class starting Jan. 16, the air carrier said on Monday. Alcoholic beverages including wine, beer, brandy and champagne will be served for an additional charge.

The airline cited rapidly growing fuel prices as the reason for the policy change and said that cutting down on alcohol would help keep airfares low and the rest of the menu varied. (MT)

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Kazmunaigaz Output

Kazmunaigaz, Kazakhstan's state-owned oil and natural gas company, plans to raise crude production 0.9 percent this year and cut refining.

The company plans to extract 9.45 million tons (189,000 barrels per day) this year, up from 9.36 million tons last year, which in turn marked a 5 percent increase over 2004, the company said Monday in a statement. Kazmunaigaz did not explain why growth in output would slow this year. (Bloomberg)

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Iron Ore Deposits

Aricom, a London-based company that mines for titanium in Russia, plans to pay $9 million for an option on a 50 percent stake in two iron ore deposits.

After acquiring the option, Aricom can buy the stake in the Kimkanskoye and Sutarskoye deposits in eastern Russia with an additional $61 million payment, the company said today in a statement.

The deposits contain 550 million tons of ore with an average iron content of 33 percent to 35.7 percent, the company said.

The 50 percent stake in the deposits is owned by Expokom, a company in which Peter Hambro, executive chairman of Peter Hambro Mining, has an interest. (Bloomberg)

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Putin Lawsuit

A group of about 30 people who say they have fallen victim to fraudulent construction companies intends to file a lawsuit against President Vladimir Putin in the Supreme Court, Vedomosti reported on Monday.

One such lawsuit was already rejected in November on the grounds of presidential immunity, the daily reported. The plaintiffs had sought to hold the president responsible for creating in Russia a "corrupt power system" that made it possible to defraud apartment buyers en masse, Vedomosti reported. They had asked for 200,000 rubles (about $7,000) each as compensation for moral damages. (MT)

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Detsky Mir 'Landmark'

The Detsky Mir shopping center building on Lubyanskaya Ploshchad in central Moscow is to soon join the list of historical and cultural landmarks of regional value, a spokesman for Moscow's Cultural Heritage Committee said on Monday.

Detsky Mir, or Children's World, was designed by architect Alexei Dushkin, the author of several Moscow metro station designs, and it was built in 1957 as Europe's largest children's goods store.

In 2004, Russian media reported that the mall's owner, services group Sistema, planned to demolish the building. The building's listing as a landmark would make its owners responsible for its preservation. (MT)

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Red Book Buildings

Two local preservation societies have published an online list of endangered Moscow buildings, with pictures and linked articles charting the capital's most threatened historical sites.

Envisaged as an architectural version of the government's Red Book of endangered species, the list (www.archi.ru/moscow.sos) is divided into categories spanning development from 17th- and 18th-century palaces to 1960s-1980s modernism.

At present there are 21 buildings listed, ranging from the 18th-century mansion at Tsaritsyno to the 1968 Rossiya Hotel, but it will soon include more than 150 buildings, said the project's organizer, Marina Khrustaleva.

The list is a joint project of the Arkhi.ru architectural portal and the Moscow Architectural Preservation Society. (MT)

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Czech Selloff

Ceskoslovenska Obchodni Banka, or CSOB, the largest Czech lender, said on Thursday that it had completed a 3.2 billion crown ($135.2 million) sale of 10 mostly historical buildings in Prague to four investors.

CSOB said in a statement that real estate developer Orco would take over the biggest complex of historical buildings in the center of the Czech capital. The deal is one of the biggest real estate selloffs in the Czech Republic. Seven buldings will be bought by a joint venture of Lordship and Immoeast, a subsidiary of Austria's Immofinanz.

The Czech-Austrian group of Prumstav, Stavebni a Inzenyrska Spolecnost and Plan und Bau also acquired one building. Another building was sold to investment bank J&T and Belgium's Buelens last year.

CSOB is building a new headquarters in a Prague suburb, to which it plans to move in 2007. Until the move, it will stay in the existing offices, the bank said. (Reuters)

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China Slowdown

SHANGHAI, China -- Property sales in China are expected to rise by 20 percent in 2006, slowing from 30 percent annual growth last year, the state planning agency said in a report published Thursday.

"The property sector has entered a medium-term correction since mid-2005, which may last for at least three years," the National Development and Reform Commission said in the report, carried by state-run newspaper China Securities Journal.

Some of the weaker property developers are bound to succumb to the correction, saddling banks with unpaid loans, the report said, without elaborating.

It said it would be "unrealistic" to expect any rebound in the next two years.

The report did not give a dollar figure for property sales. However, it said the value of property investments rose 21 percent in 2005 to 1.59 trillion yuan ($197 billion). (AP)

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For the Record

"Dnevnoi Dozor," or "Day Watch," Russia's latest home-grown blockbuster, generated $26 million in its first 15 days, the film's producer said late Monday. Six million people have seen the movie so far, said Channel One, which produced the film. (MT)

Primorsk Sea Shipping, Russia's third-largest shipper by tanker capacity, said transport of crude and oil products rose 7 percent last year to a record as the shipper received new tankers. Oil produced on Sakhalin Island accounted for 10 percent of the total crude transportation. (Bloomberg)