INDIA - ENERGY

India, Iran Close To Signing Pact In Energy Cooperation
India and Iran are close to reaching an agreement that will allow Indian petroleum companies to explore for oil and natural gas in Iran and set up joint ventures in petrochemicals in the two countries.
"The long-awaited package of measures for cooperation in the hydrocarbon sector has been virtually finalized through three rounds of negotiations in Vienna between the Indian Petroleum Minister Mani Shankar Aiyar and his Iranian counterpart Bijan Zanganeh," said an Indian government statement.
The final agreement is likely to include Indian participation in three Iranian oil fields, joint exploration of gas fields, long-term purchases by India of Iranian liquefied natural gas and modernization of two Iranian refineries by the state-run Indian Oil Corp. (530965.BY).
Aiyar is in Vienna to attend the summit of the Organization of Petroleum Exporting Countries.
The Indian government is encouraging state companies to bid for overseas petroleum assets to ensure the country's energy security.
To meet consumer demand of the world's seventh-largest retail oil market, worth $15 billion a year, India imports about 70% of the crude oil it uses. More than 60% of its imports come from Middle Eastern countries. India's total petroleum products consumption is close to 108 million metric tons a year.
Write; by Himendra Kumar. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



OIL SECTOR - MARKET

Demand, Speculation, Not Supply, Behind Oil Prices
Unrestrained demand and speculative trading, rather than a lack of supply, are to blame for today's high oil prices, India's petroleum minister said Friday.
In particular, rising current account and budget deficits show the U.S. isn't trying to restrain its spending, avoiding steps that could blunt growth in oil demand, Mani Shankar Aiyar said in an interview on the sidelines of an energy conference organized by the Organization of Petroleum Exporting Countries.
"There's not an energy deficit as such, but yes, there is a huge account deficit. There is a huge budget deficit," Aiyar said of the U.S. "If you started addressing those, there would be a restraining of demand, and the restraint on general demand in the U.S. would also be a restraint on oil."
High prices are also the result of the declining value of the U.S. dollar, Aiyar said. OPEC has that and speculation as factors behind today's high prices. Oil is traded in dollars on global markets.
Oil prices have shot up by more than 50% this year, as surging demand has pushed suppliers to the limit, leaving too little spare capacity to cover disruptions in places like Iraq.
India imports about 70% of the crude oil it uses, with more than 60% of this coming from countries in the Middle East. Domestic consumption of petroleum products in India is close to 108 million metric tons a year and growing.
Aiyar, who addressed the conference Friday, met this week with Saudi Oil Minister Ali Naimi and other oil heavy hitters this week. He said he no longer believes oil supply is the problem.
"I have been persuaded by what I've heard this week that there is not a supply problem," Aiyar said. "There is a problem of speculative trading. There is a problem of the erosion of the dollar...and there is a problem of deficits of various kinds, all of which is contributing to this otherwise inexplicable rise in prices."
Write; by John M. Biers. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



CHINA - ENERGY

China Reiterates Hope Of Oil Pipeline Deal With Russia Archived Story
Beijing Friday stepped up pressure on Moscow to approve a proposed oil pipeline deal, ahead of a visit by senior Chinese officials to Russia next week.
Premier Wen Jiabao is scheduled to visit both Kyrgyzstan and Russia between Sept. 21 and Sept. 25.
He is expected to meet Russian President Vladimir Putin.
"Construction of the pipeline is the core issue in energy cooperation between the two nations," said Li Hui, a senior official under Minister of Foreign Affairs Li Zhao Xing.
"We hope that no matter which pipelines (Russia chooses), there should be one via China," Li said.
Li told reporters Friday that in addition to energy, technology and other economic issues, political relations would also be on the agenda, including the fight against terrorism.
Li said energy has played an "extraordinary role" in bilateral trade and economic relations between Russia and China and will "certainly" be on the agenda of the upcoming high-level meetings.
Russia overtook the Middle East as China's biggest supplier of crude oil in June, and Li said two-way trade between the two countries would top a record US$20 billion this year, up from US$15.7 billion in 2003.
The official didn't indicate whether China anticipates a pipeline deal during Wen's visit.
China has long sought a deal for a pipeline to link the almost-depleted Daqing oil field in its northeast with the Angarsk fields in Siberia.
Japan, however, is also lobbying Russian officials to sign a deal as soon as January for a pipeline running to Russia's Pacific coast city of Nakhodka, from where oil could be shipped to Japan.
Li said he had no specific information on what deal would be successful, but said China is prepared to cooperate in other energy areas. He suggested deals on natural gas supply from Russia may also be on the agenda.
He also noted the "promising prospect" of transporting oil from Russia to China by rail.
Premier Wen will first visit the central Asian state of Kyrgyzstan for a six-nation meeting of the Shanghai Cooperation Organization, which includes China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.
Write; by Victoria Ruan. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



POLAND - ECONOMY

Hausner eyes 5.1-5.2% GDP growth in Q3 and Q4 04, but sees lower investment rise
Economy Minister Jerzy Hausner said Friday he sees third- and fourth-quarter GDP growth of 5.1-5.2%, according to comments cited by the PAP news agency. That would give full-year growth of 5.7-5.8%, the minister said. Yet, he also admitted that lower-than-expected investment figures from the first half meant his prediction of 10% investment growth this year was unlikely to be realised.
The third and fourth quarter predictions mark a slowdown from GDP growth of 6.9% in the first quarter and 6.1% in the second (6.5% for the first half). But Hausner stressed that the lower figures did not mark any slowdown in the growth pace. The lower rates were rather a result of base effects as growth began picking up in the second half of 2003, he said.
The minister acknowledged that investments would play a smaller role than he once expected. His admission was predicated on the fact investments rose by 3.3% in the second quarter after rising 3.5% in the first. Some bank analysts had expected growth of as high 7% in the second quarter.
“This means that the increase will mainly be pulled by exports plus consumer demand, which is rising quickly, though not in a way that would threaten price stability and lead to faster inflation,” the minister was cited saying.
Hausner also expects the August jobless rate to fall to 19.1% from 19.3% in July and then down to 18.9% in September. The minister said recently that he expected the jobless rate at end-2004 to be 18.8-18.9% and at end-2005 to be below 17%, over a percentage point lower than the 18.2% written into the initial 2005 budget draft.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



RUSSIA - FINANCE

Yukos manages to pay USD 2.2-2.4bn on the tax claim
Yukos has so far paid USD 2.2-2.4bn of the tax claim bill, announced Bruce Misamore, Yukos's CFO. The total bill that the company has to pay is more than USD 7bn, while only USD 3.4bn (for 2000 back taxes and penalties) has been recognized in court yet. The company had to pay the USD 3.4bn claim till end-August but it could not. Misamore assured that the company is trying to stay afloat using all resources it can to both pay taxes and somehow scrape for operation. He said that USD 2bn in revenues are coming every month, of which USD 1bn goes to taxes while the other USD 1bn goes into the frozen accounts. In that respect, he said that the chief concern is keeping the company operational and if there were a choice between taxes and operation, the management would put the money in operations. The company is close to bankruptcy but he assured that the management has no intention to call it now. The statement comes after earlier today the company posted a massive 5-time increase in the estimated value of potential reserves of Yuganskneftegas - the largest oil-producing unit of Yukos.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



TURKEY - FINANCE

25% in Denizbank to be sold by public auction
25% of Denizbank’s shares will be sold through public auction on 23-24 September according to a statement from the bank today (17 September). Denizbank reported USD 50mn of profits for H1, up by 233%. The bank’s assets were also up by 66% to USD 4.8bn, while the rate on equity reached 25%, up by 16pps in the same period. Meanwhile, the capital adequacy ratio of the bank was 17%. USD 3.4bn was used through the bank as credits in H1, where USD 7.2bn of FX trade volume – up by 38%, and USD 3bn foreign trade volume – up by 55% was realised. On the other hand, the bank’s gold trade volume reached USD 3bn in the same period. The bank is owned by Zorlu Group since 1997 and has 13 affiliates, 190 branches and two banks abroad – one in EU and another in Russia. Fitch Ratings had on 6 September raised Denizbank’s national rating from BBB+(tur) to A-(tur), while the bank’s long-term FX rating and local currency rating were confirmed at B+, while individual rating was confirmed at D. The outlook of Denizbank was deemed “stable”, where the upgrade relied on the successful development of the medium-sized bank according to the same statement by Fitch.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



HUNGARY - FINANCE

Government to raise car registration taxes to gain HUF 8-15bn in 2005
The government plans to hike up car registration taxes in 2005 in order to raise budget revenues by HUF 8-15bn (EUR 32-60mn). The tax was introduced earlier this year as a compensation for the losses of car import duties due to EU accession. The introduced tax level did not seem to be high enough, as car registry tax revenues fell considerably short of their target so far. According to the plans, the car registration tax will be raised by 7-8%, VAT will be levied on the registration tax augmented value of cars and motorbikes will also be subject to this tax.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



CZECH REPUBLIC - CORPORATE FINANCE

Plzensky Prazdroj brewery pays out CZK 2bn dividend
The biggest Central European brewery Plzensky Prazdroj is to pay out CZK 2bn (EUR 65mn) in dividends, today’s general shareholder meeting decided. This amount is the same as the previous year and accounts for 71% of the company’s net profit in the financial year ending March 2004. Net profit increased by a healthy 30% y/y, which the company’s management attributed to the lower income tax rate. 96.85% of the brewery is owned by SABMiller.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



ROMANIA - OIL SECTOR

Lukoil to restart Petrotel refinery soon
The Petrotel Ploiesti refinery (located some 60km north of Bucharest), owned by Russia’s Lukoil, with a refining capacity of 3.5 million tonnes, will be opened in the near future. Lukoil president, Vagit Alekperov, mentioned September or October for re-launching the refinery Lukoil bought in 1998, but shut down in 2001 while laying off 2,400. Upon closing Petrotel, Lukoil said the reason was a USD 25mn programme for modernisation enabling Petrotel supply Euro 4 and Euro 5 fuels, however the closure was largely seen as a move to force the Romanian state grant some facilities which eventually happened. Alekperov made the statement after announcing the Russian group’s plans to hike the oil output to 90.2mn tonnes in 2005 from 81.5mn tonnes this year. After closing Petrotel, Lukoil saw losses worth ROL 455bn. Apart from Petrotel, Lukoil operates as many as 230 filling stations in Romania. Lukoil initially announced the opening date in June this year, following modernisation, saying the bulk of the output would be exported mainly in the Republic of Moldova where Lukoil operates 80 stations and Hungary.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



CROATIA - ECONOMY

Government issues EUR 750mn domestic bond since start of year
The government has placed EUR 750mn worth of bonds on the domestic market since the beginning of the year, Finance Minister Ivan Šuker said. He added that this has led to lowering of domestic interest rates by 1.29pps ytd to 5.94%. Besides, Šuker asserted that the cabinet has managed to slow down foreign debt, growth as recommended by IFIs, and now the debt stock stands at some USD 26bn. He added that in line with this target, the ministry has given up the idea to float new Samurai bond and would seek financing from the local market instead. Šuker continued that the government has given green light to EUR 300mn domestic bond issue to be placed on 20 September. The bonds will mature in 2014 and carry interest rate of 5.5% p.a. On the same day, the ministry will redeem EUR 200mn bonds, placed three years ago. Besides, it will repay HRK 410mn credit of state social insurance fund HZZO, as well as lend another HRK 230mn to the state-owned road building corporation HAC. On his part, Prime Minister Ivo Sanader asserted the new bond issue would not boost public debt as the accumulated funds would be used for repayment of part of the outstanding debt principle, as envisioned in this year’s budget plan.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -


UKRAINE - FINANCE

Cabinet forecasts high GDP rates, lower inflation in mid- and long-term
The government disclosed its long-term forecast for development of the economy in 2005-2015. According to it, the GDP growth rate will fall significantly from the planned 12.4% y/y growth in 2004, but will remain quite high – 6-8.6% y/y in 2005-2010, slowly decelerating to 5.5-6% y/y in 2011-2015. There have been no comments from local economists on this forecast, but most likely it will be deemed extremely optimistic. It seems entirely possible that the figures have been influenced by the desire to increase the public appeal of the PM by pointing that his government already has reached high growth rates and should be left in place to strengthen these achievements.
The CPI inflation, both y/y and eop, should remain within a one-digit range, slowing to about 4-5% y/y and eop by 2008. the revised inflation targets for this year suggest 7.6% y/y and 7% eop inflation, instead of 6.8% y/y and 6.3% eop targets used earlier. The annual inflation is often underestimated by the government at the start of the year. In 2003 the government forecasted 7.2% eop inflation, while the actual figure was 8.2% eop. The government also plans to enjoy foreign trade surpluses in 2005-2008, which is entirely likely, considering constant surplus in services and existence of capacities for expansion of primary exports with high foreign demand – ferrous metals, chemical production and machinery. The expected drop in surplus should be caused by growing imports fuelled by increasing disposable incomes, economic growth and investment demand.
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -



EUROPE - TELECOMUNICATIONS

Tiscali takes users to the movies
European ISP Tiscali has partnered with CinemaNow to offer films to consumers in the UK, Germany and Italy, to stream or download.
CinemaNow provides online video-on-demand (VOD) distribution and technology, with content partners including 20th Century Fox, Disney, Lions Gate, MGM, Miramax, and Warner Bros.
The firm has licensed its PatchBay technology to manage part of Tiscali’s on-demand services, including digital and territorial rights protection, user profiling, pay-per-view and subscription services.
PatchBay uses Microsoft’s Digital Rights Management solution and is integrated with Microsoft’s Windows Media 10 Series.
Mario Mariani, senior vice president business development of Tiscali Corporate, said: “Just as we did with our revolutionary Music Club, Tiscali is stepping in the domain of legal online movie distribution throughout Europe. Working with CinemaNow allows us to expand our content offerings and provides us with a simple technology solution that can manage the complexities of a video-on-demand service.”
Write; by LuisB. September 2004
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -