3 Sep 2010 10:24

Moscow press review for September 3, 2010

MOSCOW. Sept 3 (Interfax) - The following is a digest of Moscow newspapers published on September 3. Interfax does not accept liability for information in these stories.


In August Russian oil production reached 42.5 million tonnes (on average 10.059 million barrels per day). This is 0.9% more than last year, but by July the indicator had dropped by 0.8%. Fluctuations in the nationwide production began as early as spring, prior to that it had been steadily growing for more than a year. In July the indicators of the majority of players began to align, and total oil production nationwide broke another decade record by reaching 10.137 million barrels per day. The main driver of the production slump in August were PSAs (Sakhalin-1, Sakhalin-2, Kharyaga), said Denis Borisov, analyst at the Bank of Moscow . Their total production dropped 37%. ("Scarce oil")

The Russian Finance and Energy Ministries are preparing a document changing the scheme of budget revenues from two PSA projects - Sakhalin-1 and Sakhalin-2, officials from these ministries told Vedomosti. On May 11, 2009 Prime Minister Vladimir Putin signed a decree allowing these PSA participants to pay royalties in the form of gas, not money, as of 2011. Now officials found out that the scheme violates the Budget Code. Under the BC, treasury revenues must be in a monetary form, not in kind, a Finance Ministry official said. Gazprom is informed of the problem and will be looking for a solution together with the state agencies, a Gazprom official said. ("State gavel")

Gazprom is turning from a gas into energy giant: gas sales brought it less than two thirds of its profit. The course towards business diversification taken a few years ago proved itself right: despite the falling profits from sales in Europe, the company tripled its profit to 336.85 billion rubles. Gazprom was able to triple its profit despite the sharp fall of its profits from selling gas in Europe, its principal market (by 22% by the first quarter 2009). ("According to Miller's plan ")

Evraz Group's GAAP proceeds in the first half-year rose by 38% on the same period 2009 and reached $6.4 billion, EBITDA rose 2.5 times to $1.154 billion. Losses decreased 3.7 times to $270 million. This loss was formed as a result of overevaluating assets and equipment (by $416 million) and single transactions (by $138 million), the company said. The sale of the Koksovaya mine resulted in a $50 million loss for the company. Without these factors, the company's net profit would have been $284 million. But apparently such an explanation did not placate investors: on Thursday the company's capitalization dropped by 1.9% to $11.7 billion. At the same time, the price of shares of most Russian steel works has risen. ("No profit, no dividends," also Kommersant, page 8, "Evraz did not reach crisis")


Speaking at the State Council presidium on Thursday Russian President Dmitry Medvedev tried to calm down the public by announcing that there are no economic reasons for growing food prices and for food shortages. The responsibility for the market situation was laid on the government and regional authorities. "Those who want to up the prices" will be scrutinized by police, the Prosecutor General's Office and the Federal Anti-Monopoly Service, the president said. (page 1, "Price left without food")

In the second quarter, the VTB , like Sberbank , failed to set another record profit like it did in the first one. However, unlike its closest rival, the VTB pleased the market with considerably increased lending - the corporate portfolio rose 12% (Sberbank showed a 1% reduction). As a result, the bank cut the share of bad loans in its portfolio for the first time since the start of the crisis. (page 8, "New debts wash out old arrears")