MOSCOW - A Russian government official said on Wednesday that falling oil prices could lead to lower than expected growth and higher inflation next year, but saw no crisis situation for the economy.
"In fact, we consider that there are no serious reasons for the expected fall in oil prices to lead to a crisis situation," Deputy Economy Minister Arkady Dvorkovich told an investment conference.
"We think that GDP growth could be not the 3.5 to four percent set in the (2002) budget, but one to two percent," he added. "Inflation could be a little bit higher, not 13 percent but 15-16 percent." //Reuters

MOSCOW - Russian automaker AvtoVAZ on Wednesday cut its net profit forecast for 2001 by 30 percent to seven billion roubles ($233.8 million), citing continuing bad loan provisions.
It added that pre-tax profit in 2002 would fall to 7-8 billion roubles from this year's estimated 15 billion because of higher costs for electricity.
"This year the profit will be a bit lower (than forecast) as we will have to cover losses from previous years," AvtoVAZ vice president Nikolai Lyachenkov told reporters on the sidelines of an auto conference.
AvtoVAZ had in August forecast a 10 billion rouble net profit in 2001 after a net loss of 3.8 billion roubles the previous year. It saw 90 billion roubles in revenues in 2001 and growing revenues next year.
The debt-laden company, which makes the ubiquitous but notoriously low-quality Lada vehicles, has made losses for a number of years.
AvtoVAZ plans to produce 758,000-759,000 vehicles and 63,000 kits of auto parts this year, raising output to 758,000-760,000 vehicles and 103,000 auto kits next year.
Lyachenkov said AvtoVAZ hoped the government would return a stake of 50 percent plus one share, held as a collateral for the tax debt, by the end of this year.
"The controlling stake is not yet returned but we hope the government will return it soon. The resolution is ready," he said. President Vladimir Putin agreed in June to restructure AvtoVAZ's 2.9 billion roubles debt, but the deal requires government approval.
AvtoVAZ was last traded on December 4 at $15.99. //Reuters

KIEV - Ukrainian Foreign Minister Anatoliy Zlenko asked his Canadian counterpart, John Manley, for Canada's help in expediting Ukraine's bid to join World Trade Organization.
Ukraine asked Canada, which has a large ethnic Ukrainian community, to help complete preliminary procedures for Ukraine's entry to the WTO by the end of next year, Zlenko said.
Zlenko said Ukraine's bid should be considered at the same time as that of neighboring Russia, whose long-stalled efforts to join the WTO have enjoyed increased support from U.S. officials in recent months amid Russian support of the U.S.-led anti-terrorism campaign.
"It would be undesirable if Ukraine is left behind Russia," Zlenko told a news conference in Kiev.
Manley said Canada is ready to "provide technical support" to Ukraine on its way to the WTO.
The ministers signed a declaration on developing cooperation that expanded on a 1994 accord by boosting economic relations.
Both ministers also discussed ways to increase trade. Trade volume between the two states was dlrs 82.8 million in 2000, up from dlrs 49.75 million in 1999, according to Ukraine's Foreign Ministry.
Manley, who arrived in Kiev late Tuesday, also met with Ukraine's President Leonid Kuchma and was expected to meet with Prime Minister Anatoliy Kinakh later Wednesday.
Before departing later in the day, Manley was expected to deliver a speech to foreign service students in Kiev. //AP

MOSCOW - Defending FIDE world champion Viswanathan Anand of India defeated Russias Alexey Dreev to advance to the fifth round in the FIDE world championship tournament here on Wednesday.
Dreev chose the solid Caro-Kann defense as Black.
Anands second Elizbar Ubilava said that on move 20, Anand had "a slight advantage." But on move 25, Dreev blundered by taking a pawn with the wrong move order. This allowed Anand a simple combination, and it was all over.
Although Anand missed a chance to end the game quickly, he emerged with two extra pawns. But his pawns were split. Ubilava said: "Black has reasonable chances to draw. White must play very precisely."
Anands technique was up to the task. He gave back one pawn in order to get an outside passed pawn. Dreev's passed e-pawn was no match for Anands a-pawn and Dreev resigned on move 42.
In other games, second-seed Michael Adams of England drew with Peter Svidler of Russia to tie their match, Vassily Ivanchuk of Ukraine advanced with a draw against Chinas Ye Jiangchuan, Evgeny Bareev of Russia advanced with a win against Jaan Ehlvest of Estonia, and Russias Alexander Morozevich defeated Ruslan Ponomariev of the Ukraine to force a playoff.
Israels Boris Gelfand drew with Zurab Azmaiparashvili, and they were to play it off later Wednesday.
The tournament is organized as a series of two-game elimination matches, with rapid and blitz playoffs in the case of ties. This format has led to an abundance of upsets in the past, but this year eight of the top nine players have survived to the final sixteen. Only fifth seed Peter Leko of Hungary has been eliminated.
Wednesday's playoffs were to reduce the field to eight. The finals will be held here in January.
Sixty-four top women players are also competing under the same format for the women's world championship. The world's strongest woman player, Judit Polgar of Hungary, played in the men's championship and was eliminated in the second round.
Former world champion Maya Chiburdanidze of Georgia defeated Zhaoqin Peng of the Netherlands to stay alive and force a playoff.
A few blocks away, former world champion Garry Kasparov and Braingames world champion Vladimir Kramnik play the fourth game of their match at regular time controls. The first three games were drawn. They will play 20 games at various time controls for a purse of dlrs 500,000.
Chess has had two world champions since 1993, when then-world champion Garry Kasparov broke away from FIDE and formed the Professional Chess Association. He defended his title under the PCA's auspices against Short in 1993 and against Anand in 1995. The PCA was dissolved in 1998. //AP

MOSCOW - A freight train derailed in northern Russia, damaging tracks and blocking rail traffic for hours Wednesday, official said.
A train carrying ore derailed near the town of Unezhma, some 880 kilometers (550 miles) north of Moscow, at 11:45 p.m. (1945 GMT) Tuesday, said Larisa Papushina, a spokeswoman for the Arkhangelsk regional police. There were no injuries.
All three tracks were damaged when 27 out of the 57 cars derailed, halting both freight and passenger service, she said. Service on one track was restored as of 1 p.m. (0900 GMT) Wednesday.
Trains are the main form of transportation in the remote Unezhma area, since the roads are impassable in winter, Papushina said.
Officials were investigating the cause of the accident. //AP

MOSCOW - A court in southern Russia heard a police witness's account Wednesday of a 1996 hostage-taking raid in the high-profile trial of a Chechen warlord.
Salman Raduyev, the highest-ranking Chechen rebel commander to be put on trial in a decade of conflict in breakaway Chechnya, led a January 1996 raid on the southern Russian city of Kizlyar, in which 78 people were killed. He is charged with terrorism, banditry, hostage-taking, and organizing murders and illegal armed formations.
Magomed Omarov, deputy interior minister of the republic of Dagestan, which borders Chechnya and where Kizlyar is located, told the court Wednesday that he saw local police gunned down as they ran to respond to the emergency on the day of the raid.
He also testified that Dagestani political figures who offered to take the place of the hostages were deceived by Raduyev and his associates: The politicians were taken hostage, but the original hostages were not released.
Raduyev admits leading the Kizlyar raid but says he was only following the orders of Chechen rebel president Dzhokhar Dudayev and did not intend for the raid to turn violent. However, he denies involvement in other terrorist attacks prosecutors have blamed him for.
Russia's 1994-96 war in Chechnya ended with de facto independence for the region. Russian troops returned three years later after more rebel incursions into Dagestan and after apartment-house bombings in Russian cities killed more than 300 people. Russian officials blamed the blasts on the rebels.
The two sides have been locked in a bloody stalemate for more than a year. While large-scale combat operations have ceased and a pro-Moscow administration has been established, hit-and-run attacks and land mines continue to bring daily Russian casualties.
Rebels shelled Russian outposts 11 times in the past 24 hours, killing four servicemen, an official in the Moscow-appointed administration said Wednesday on condition of anonymity.
Another serviceman was killed when his truck hit a land mine in Grozny, the capital, the official said. Two sappers were killed trying to defuse another mine. //AP

MOSCOW - Mosenergo , a utility which powers the Russian capital and surrounding region, said on Wednesday it saw 2001 results up from 2000 but that regulatory and restructuring uncertainty obscured its longer-term future.
Top company officials said they were unable to make firm calls on debt management and investment without clarity on key issues such as rises in state regulated tariffs, a key driver behind the company's financial improvement this year, and Mosenergo's fate in a national utility restructure.
"There has never been a December when there have been so many variables," Deputy General Director Vladislav Nasin said at a briefing with analysts and reporters.
"We have strict scenarios worked out for every unpleasant turn of events. In principle we are prepared to respond to the situation," he added.
Company officials forecast an increase in cash-based 2001 Russian-standard net profit to 1.9 billion roubles ($63.46 million) from 1.44 in the previous year. Sales revenues were expected to rise to 45.2 billion versus 33.16 billion roubles.
The company did not offer forecasts on Russian results calculated to accruals, which analysts tend to focus on. The company also published results to U.S. GAAP accounting standards.
Nasin reiterated the company would redeem in full and on time its 2002 Eurobond, worth $200 million. "Everything that is in the issue prospectus will be fulfilled," he said.
The company had previously said it did not have enough funds to repay the bond, but has since bought back some of the debt from the market, reducing the issue to about $155 million.
He said Mosenergo saw another Eurobond issues as possible.
But he said it was unclear where the firm should invest as some assets could be hived off in a national power carve-up.
Mosenergo's parent company, national electricity monopoly UES , has proposed consolidating four of Mosenergo's key power plants with plants in other regions to form national wholesale power generating companies that will be forced to compete on a liberalised market.
Mosenergo's acting chief executive, Arkady Yevstafyev, said he would like to see Mosenergo consolidate with other utilities.
"But we have no concrete offers," Yevstafyev added. "Consolidation means agreement and we have not had any such concrete negotiations."
He said tariff hikes of 20-25 percent were tentatively planned for March but were "the realm of assumptions". ($=29.94 roubles). //Reuters

HANOI - Vietnam-Russian oil and gas joint-venture Vietsovpetro has found oil in a new well in the country's key Bach Ho field, an official newspaper said on Wednesday.
The Tin Tuc (News) newspaper said according to a report from Vietsovpetro, the oil was found at well 16, south of the Bach Ho (White Tiger) field, which would provide 1,240 barrels and 7,336 cubic metres of associated gas per day.
It said the oil was found at a depth of 4,150 metres (2.6 miles).
Officials of Vietsovpetro were not immediately available for comment.
The venture between Vietnam's oil monopoly Petrovietnam and Russian Zarubezhneft pumped 11.99 million tonnes (240,785 barrels per day) of crude from Bach Ho in 2000, up from 11.59 million in the previous year.
Minor crude supply also comes from the Rong (Dragon) and Dai Hung (Big Bear) oilfields off the country's southern coast. //Reuters

MOSCOW - Russia's Foreign Ministry said Wednesday that Moscow had fully met its obligations under the START I nuclear arms reduction treaty with the United States, but said it had some "questions" about whether Washington had lived up to its part of the deal.
The 1991 treaty obligated the two countries to reduce the number of nuclear warheads from about 10,000 to 6,000 each by Dec. 5, 2001. The treaty also required each country to reduce the number of its ballistic missiles and strategic bombers to 1,600.
Russian Foreign Ministry spokesman Alexander Yakovenko said in a statement Wednesday that Russia has brought the number of its nuclear warheads down to 5,518 and reduced the number of its missiles and bombers to 1,136.
"We expect the United States to also reach the thresholds designated by the treaty," Yakovenko said in the statement. "At the same time, we have questions concerning (its) fulfillment of some obligations under the treaty."
"We proceed from the assumption that these issues will be solved in the nearest future," Yakovenko said without elaborating.
A team of Russian military experts led by Maj.-Gen. Nikolai Artyukhin has arrived in the United States to check their compliance with the START I treaty, the Interfax news agency reported Wednesday.
The agency quoted an unidentified Defense Ministry spokesman saying the U.S. military had denied the Russian inspectors access to some facilities.
Interfax also quoted deputy chief of Russia's General Staff, Col.-Gen. Yuri Baluyevsky as saying that Russia has a lot of questions about U.S. compliance with the treaty. He said U.S. and Russian military officials may meet in late December or early January to discuss the issue on Moscow's request.
During last month's U.S.-Russian summit, U.S. President George W. Bush and Russian President Vladimir Putin vowed to further reduce the number of nuclear weapons.
Putin pushed for new reductions to be incorporated into a treaty complete with control and verification procedures. Bush, who has voiced skepticism about such binding agreements, did not go along with that suggestion.
U.S. and Russian officials said that they would continue work to reach a compromise on the issue and also decide what should be done with nuclear warheads once they are removed from the missiles.
In his statement Wednesday, Yakovenko reiterated Russia's desire to strike a formal agreement on further cuts.
During the summit, Bush and Putin failed to reach an agreement on the issue that divided them most, U.S. national missile defense plans. Russia had opposed any effort to dismantle the 1972 Anti-Ballistic Missile Treaty which bars such missile shield, but Putin said that Moscow was open for further discussions on possible modifications to the treaty and pledged that the issue wouldn't mar bilateral relations like it did in the past. //AP