Russia 100414 Basic Political Developments

Bloomberg: Rusal Awards Deripaska, Management IPO Bonus Shares (Update1)

http://www.businessweek.com/news/2010-04-14/rusal-awards-deripaska-management-ipo-bonus-shares-update1-.html
April 14, 2010, 12:34 AM EDT

(Adds value of shares in second paragraph.)

April 14 (Bloomberg) -- United Co. Rusal said it awarded Chief Executive Officer Oleg Deripaska and employees 56.6 million of bonus stock for helping the world’s largest aluminum maker sell shares in a public offering in Hong Kong.

Billionaire Deripaska was given 50.6 million shares, worth $70 million at the IPO offer price of HK$10.80 each, the Moscow- based company said in a statement to the Hong Kong stock exchange. Senior management and employees were given about 6 million shares.

The bonus shares were awarded a day after Rusal, the first Russian company to sell shares in Hong Kong, said it swung back to profit in 2009 and forecast rising demand for its products. Rusal’s shares are down about 13 percent since its January IPO, weighed down by concerns about debt of at least $12 billion.

“This question of remuneration is generally not much of an issue in Hong Kong as there’s little history of shareholder activism,” Francis Lun, general manager at Fulbright Securities Ltd., said in Hong Kong.

Rusal fell 0.4 percent to HK$9.36 at 10:24 a.m. in Hong Kong trading.

The shares were given “for services provided in preparation of the global offering,” Rusal said in the statement. The stock will be subjected to a two-year lock-up period, it said. Chief Executive Deripaska can transfer 16.9 million of his bonus shares to a third party should they agree to the same lock-up period, it said.

Lenders Support

Lenders supported a pay package for Deripaska, which includes an annual base salary of $10 million, because they want to retain his services, Oleg Mukhamedshin, deputy chief executive officer of capital markets at Rusal, said Jan 11.

The basic annual pay for Deripaska, 41, is about five times more than the comparable compensation for the CEO of BHP Billiton Ltd., the world’s largest mining company. Melbourne- based BHP Billiton paid Chief Executive Officer Marius Kloppers $10.4 million in the 2009 fiscal year, including a base salary of $2 million.

Rusal this week said net income for 2009 was $821 million, recovering from a loss of $6 billion a year ago as improving metal demand more than doubled the value of its 25 percent stake in OAO GMK Norilsk Nickel, Russia’s largest mining company. Sales in the second half rose 17 percent from the first six months, the company said.

Rusal’s share offering was delayed at least twice by Hong Kong regulators over questions about its debt, and the company was barred from marketing the shares to retail investors. Rusal cut its borrowings after raising $2.2 billion selling shares to investors including Hong Kong billionaire Li Ka-shing.

--John Duce. Editors: Tan Hwee Ann, Keith Gosman.

To contact the reporter on this story: John Duce in Hong Kong at [e-mail]

To contact the editors responsible for this story: Tan Hwee Ann at [e-mail]; Amit Prakash at [e-mail]

RUVR: Christie's opens office in Moscow

http://english.ruvr.ru/2010/04/14/6395542.html

Apr 14, 2010 09:55 Moscow Time

One of the world’s leading art auctions – Christie’s – has opened an office in Moscow. Christie’s has been operating in Russia for about 17 years but up to now has had no permanent representation in the Russian capital, the auction’s Moscow Office Director Matthew Stevenson had told RIA News. Christies has offices in more than 30 countries and about ten trade houses across the world, including in London, New York, Paris, Geneva, Milan, Amsterdam, Dubai and Hong Kong.

Moscow Times: For the Record

http://www.themoscowtimes.com/business/article/for-the-record/403890.html
14 April 2010

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  A 13 percent stake in insurer Rosgosstrakh may be sold in July or August, the Economic Development Ministry said Tuesday. (Bloomberg)
  
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  Renaissance Capital is “on track” with its expansion plans in Africa and may enter three new markets this year, Patrick Mweheire, RenCap said Tuesday. (Bloomberg)
  
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  Russian Technologies hired Renaissance Capital to help manage assets and lure funding at home and abroad, the companies said Tuesday. (Bloomberg)
  

Activity in the Oil and Gas sector (including regulatory)

Base oil Report: Russia's export duty on light petroleum products jump to USD 202 - 204/MT, While for Heavy petroleum products USD109 - 110/MT...

http://www.baseoilreport.com/20101304/russias-export-duty-light-petroleum-products-jump-usd-202-204mt-while-heavy-petroleum-produ
Base Oil Report: As per information.Russia's export duty on its Urals crude could be increased from the current 268.9 U.S. dollars per ton to 281-284 dollars per ton from May 1.The average price for Urals crude was 78.11 dollars per barrel from March 15 to April 14, compared with 75.52 dollars per barrel for the previous monitoring period. To mirror the rise in oil prices, the oil export duty should further rise to 281-284 dollars per ton.Meanwhile, duty on light petroleum products will jump to 202-204 dollars per ton, and duty on heavy petroleum products 109-110 dollars per ton.The Russian government adjusts oil export duties monthly to reflect fluctuations in global oil prices.
14.04.2010

Oil and Gas Eurasia: Russia: Time to Stimulate Innovation in Oil Production

http://www.oilandgaseurasia.com/news/p/0/news/7023
Russian Natural Resources Minister Yuriy Trutnev has issued instructions to establish a working group to draft steps to provide economic stimulus for projects that will increase oil production, Prime-TASS has reported. The group will be tasked with preparing a list of pilot projects using innovative methods to develop "difficult" reserves. A second list will identify priority methodologies for increasing oil output which require additional economic stimulus to be implemented. Both lists are to be drafted by May 2010, along with proposals for implementing stimulus mechanisms.

By June 2010, the Ministry, together with Russian oil companies will choose the best proposals for implementing innovative technologies in subsoil development, specifically to improve the profitability of difficult reserves and to recover crude from reserves nearing depletion.

Copyright 2010, Oil and Gas Information Agency. All rights reserved.
13.04.2010