Monday, January 28, 2008
Russia plays down talk of gas cartel
24 January 2008 - Upstream OnLine - Russia has played down fears it would back the creation of an Opec-like gas cartel at a meeting in Moscow in June after a newspaper reported Iran had urged turning an informal gas club into a more powerful body. "It would be a different structure to Opec with completely different goals," a spokesman for Gazprom told Reuters. "If one of Opec's key goals is to set production volumes to influence prices, we have a different goal - to co-ordinate investment strategies and make sure there is a balance between production capacities and market needs in the long-term," he said. The Kommersant business daily on Thursday quoted Russian industry sources as saying Iran had made a proposal last year to turn the so-called Gas Exporting Countries Forum, an informal club of the world's major gas exporting nations, into a more formal organisation.
Vekselberg names his price
24 January 2008 - Upstream OnLine - Billionaire Viktor Vekselberg would be prepared to sell his stake in Russian producer TNK-BP if the buyer pays $60 billion for the entire company - a huge premium to current prices, it was reported today. Vekselberg told Moscow-based business daily Vedomosti neither he nor his Russian partners were holding talks Russia's with gas export monopoly Gazprom or state oil major Rosneft about selling their holdings. Such a move became possible after a lock-up period on the Russian shareholders, who have 50% in TNK-BP, and UK supermajor BP , which owns the remaining 50%, expired at the end of last year. Vekselberg and other Russian stake holders have repeatedly denied plans to sell, and Vekselberg's interview is the first indication of a price at which the sale would be possible. "(I would be prepared to sell out) based on the company's overall capitalisation of $60 billion. But no one is offering such money," he told the newspaper. TNK-BP's market capitalisation has been fluctuating around $40 billion for the past year, but recently slid to just $25 billion. The listed entity does not include TNK-BP's 50% stake in mid-sized venture Slavneft, which analysts say is worth another $7.5 billion to $10 billion. Vekselberg also said TNK-BP's 62.9% stake in the giant Kovykta gas field was worth $1 billion, more than the previously suggested $600 million to $800 million. Vekselberg said the increase in the price was due to TNK-BP's investments in the project as it had spent over $200 million in the last six months. Under a deal, signed in June, Gazprom was to buy control in Kovytka from TNK-BP and then sell 25% back to it as part of a broader strategic pact. But finalising the deal, which was meant to happen in December last year, has been delayed fuelling market talk that Gazprom is unwilling to buy Kovykta because it will ultimately own the field later by buying into TNK-BP. "We did not receive any offers from Gazprom, either vocal or written. We are not having talks. As far as I know our partners are also not looking at letting TNK-BP go," Vekselberg said. "(We have) a development strategy for at least the next five years. Why leave the company? Today our expectations are higher than any propositions the market could make," Vekselberg said. Despite multiple denials by TNK-BP's key state holders, analysts still expect Gazprom to buy at least 50% in the company as early as this year as the Kremlin is seeking to further tighten its grip over the strategic energy sector.
Serbia, Austria Signed onto South Stream
Jan. 28, 2008 - Kommersant - Russia and Serbia have reached an agreement that will guarantee Gazprom an easy time in that country. It will buy into the state Naftna Industrija Srbije (NIS) cheaply and thus have an advantage in access to the Serbian portion of the coming South Stream Gas Pipeline, which Gazprom is implementing with Italian partner Eni. Gazprom has also received Austria's support, and half of one of Europe's largest gas markets with it. Now all Gazprom needs is Hungary. An interstate agreement on cooperation in gas and oil was signed on Friday during the visit of Serbian President Boris Tadic and Prime Minister Vojislav Kostunica to Russia. The agreement will be in force for 30 years, at which time it will be automatically renewed for five years unless one side breaks it off. Russian President Vladimir Putin reported that, in addition to that agreement, an agreement was signed on the purchase by Gazprom of 51 percent (4,158,040 shares) in NIS by the end of the year for €400 million. Under the interstate agreement, a gas pipeline with a capacity of no less than 10 billion cu. m. per year will be built across Serbia and an underground gas reservoir will be built. They will become part of the South Stream system. NIS, which produces 1 million tons of oil and refines 7 million tons per year, will be modernized. Gazprom will invest €500 million in NIS by 2012. Gazprom will have control of 78 percent of the Serbian retail market for petroleum products after the deal is completed. Russian business as a whole will control over 90 percent of that market, since LUKOIL is already the second largest presence there. NIS was estimated to be worth €1.9 billion at the end of last year. Also on Friday, Gazprom signed an agreement with the Austrian OMV for the transfer of 50 percent of the Central Europe Gas Hub, a subsidiary of OMV Gas International. U.S. officials are reported by Reuters to have expressed their dismay at the recent deals at a meeting between U.S. and Serbian officials in Belgrade, saying that the move increases Europe's dependence on Russia for gas. The U.S. expressed its preference for the Nabucco pipeline, which will run through Austria, Bulgaria, Romania and Hungary and will be completed in 2011, that is, two years ahead of South Stream. Gazprom has been unable to come to an agreement with the Hungarian MOL, which is eseential for the South Stream project. analysts say that Hungary will now be able to “name any price” for its cooperation.
“Gas OPEC” Drawing Closer
Jan. 28, 2008 - Kommersant - As a preliminary step to the formation of “a gas OPEC” out of the Gas Exporting Countries Forum, Russia is preparing to create an organization of that type within the CIS. That idea was first proposed by the Russian Gas Society, a Gazprom lobbying group in the State Duma headed by MP Valery Yazev, in 2006. When the commission of the Eurasian Economic Community meets in St. Petersburg at the beginning of April, Russia will introduce a charter for the International Association of National Nongovernmental Gas Organization (Russian abbreviation MANNGO). Although Russia has not yet officially approved the “gas OPEC” idea, which was originally suggested by Iran, this move will strengthen its position within the future cartel. MANNGO will be based in Russia, since it has the largest natural gas reserves and most extensive transport network, said vice president of the Russian gas Society Oleg Zhilin. The organization will be governed by a Moscow-based secretariat headed by a general secretary appointed to a three-year term. The purpose of the new organization, as described in the charter, is “the creation of conditions for the fair distribution of income from gas exports among producing and transporting countries and the formation of common investment sources for the development of the natural gas sector, including maintenance of the existing system of gas trunk lines in the MANNGO member states” and “development of recommendations for harmonization of the legislation of MANNGO member states in the areas of exploration, production, processing, transportation, storage and sales of gas.” The organization can be founded with two or three member states. Kazakhstan and Tajikistan have agreed to discuss the charter and Belarus is examining it.
'Gas OPEC' could be established in June - paper
MOSCOW, January 24 (RIA Novosti) - Russia and other major natural gas exporters could announce a cartel similar to OPEC in Moscow in June, a Russian business daily said on Thursday. Kommersant said, however, citing analysts, that even if the gas cartel was formed it would be unlikely to immediately achieve a comparable level of global influence to that enjoyed by the Organization of Petroleum Exporting Countries in the oil business due to U.S. and EU opposition. Members of the Gas Exporting Countries Forum, which control 73% of the world's gas reserves and 42% of production, held a session in Egypt on Wednesday and plan to discuss a charter of the new international organization based on the principles guiding OPEC at its next session in June, the daily said. The draft charter was proposed last year by Iran, which has the world's second largest gas reserves and is in need of new export markets, the paper said. Unlike the oil market, there is currently no price coordination in gas dealings. Prices are individually negotiated for five years per contract between producers and consumers. Membership in a gas cartel would give exporters greater clout and a stronger presence on Asian and European markets. Russia's Industry and Energy Ministry made changes to the draft charter and submitted it for coordination with other ministries in November after a GECF session in Doha, Qatar, in late October. The Foreign Ministry and Economic Development and Trade Ministry have criticized Iran's draft over negative political consequences it could trigger, the paper said, citing government sources. Gas producers plan to finally coordinate their positions on the charter in Moscow, which experts quoted by Kommersant warn could trigger fresh tensions in relations between Russia and the United States. Washington has labeled the brainchild of some of the world's least democratic countries as a security threat and said it was designed for "extortion". The founding fathers of the 'gas OPEC' would be Russia, Iran, Qatar, Venezuela and Algeria. An analyst with the Troika Dialog investment said an organization of gas exporting states would be created in the next few years, but it would have no major influence on the market due to fierce opposition from the U.S. and Europe. "The exporters will have to take an evolutionary, rather than a revolutionary, way to the gradual consolidation of efforts," Valery Nesterov told the newspaper. A senior Russian Industry and Energy official told Kommersant it was not clear whether the emergence of the cartel would be announced at the Moscow forum. "Talks on a new gas pricing policy have been conducted and producers' and consumers' demands have been coordinated, and recommendations on investment in the gas industry have been discussed," Stanislav Naumov admitted, adding that this did not mean that Iran's proposal enjoyed unequivocal backing. Russia's gas giant Gazprom has given no official comments on the Iranian initiative, Kommersant said. The Gas Exporting Countries Forum was set up in 2001. It has no charter, clear membership structure or representation in any country. Its permanent participants include Algeria, Bolivia, Brunei, Egypt, Indonesia, Iran, Libya, Malaysia, Oman, Qatar, Russia, Trinidad and Tobago, the United Arab Emirates, and Venezuela. Norway is an observer.
VEB to issue $2 bln loan to Rosneft for Tuapse refinery upgrade
DAVOS, January 24 (RIA Novosti) - The Russian state-run corporation Development Bank (VEB) has announced plans to grant state oil company Rosneft [RTS: ROSN] a $2 billion loan for an upgrade of the Russian south's largest refinery. "The Development Bank plans to take part in financing the modernization of the Tuapse refinery," bank CEO Vladimir Dmitriyev said on Thursday, adding that the plans included raising the enterprise's capacity and enhancing oil refining infrastructure. Dmitriyev did not specify when the loan agreement would be signed. He did not rule out further cooperation between the bank and Rosneft on other projects. Rosneft is implementing an upgrade program for the Tuapse oil transshipment complex in two stages slated to last until 2012. The oil refining volume will eventually grow 140% to 12 million tons annually (241,640 bpd) from the current 5 million tons per year (100,690 bpd) by 2010, and the oil transshipment volume will grow 110% to 19 million tons per year (382,600 bpd) from the current 9 million tons per year (181,230 bpd) by 2012. Rosneft's production in 2007 exceeded 100 million tons (735 million bbl) in 2007.
Arab sheikhs plough billions into Urals refinery
January 24, 2008 - Russia Today - The Chelyabinsk region in the Southern Urals may soon become the centre of Russian oil refining. On Wednesday, the region's government signed a contract with Arab oil and gas company, Quality Energy Petro International, to build the largest refinery in the Urals. Chelyabinsk region is adding oil processing to its list of key industries like metallurgy, machinery, construction and instrument-making, thanks to Arab sheikhs. Investors from Arab Emirates’ based firm are ready to spend $US 4.5 billion on building an oil refinery complex. On Wednesday, local authorities and QEP Chairman sheikh Adel Al Otaiba signed a protocol of intent. “Our region needs enterprises which are capable of making products with high added value,” Evgeny Eliseev said. Arab investors monitored Chelyabinsk region for months before choosing the site for the factory The oil refinery and petrochemical complex will put the small town of Korkino on the map. The plant will be built within two years. Unveiling the project at a bilingual signing ceremony, Sheikh Adel Al Otaiba, outlined its maximum capacity. “We are going to construct a 180,000 barrel per day refinery to serve the needs of the region and other parts of Russia,” Al Otaiba said. Arab investors will hold a 75% stake in the venture with the regional government owning the rest. In an unexpected gesture, the Sheikh said that every third rouble from the profits would be spent on meeting the social needs of the Chelyabinsk region.
Friday, January 25, 2008
Imperial Energy could hold IPO of its Russian subsidiary
MOSCOW, January 21 (RIA Novosti) - British company Imperial Energy said on Monday it was considering holding an initial public offering of its Russia-based oil service subsidiary, Rus Imperial Group. Imperial Energy, a British company focused on oil exploration and production in former Soviet republics, holds licenses to explore and develop oil deposits in Russia's Tomsk Region in west Siberia. "Imperial is currently reviewing its strategic options in relation to its growing oil services arm, which may include spinning off this division by way of an IPO on the alternative investment market of the London Stock Exchange," the company said in a statement. Imperial Energy has also received a number of proposals from reputable international companies to acquire a part or all of Rus Imperial Group and these proposals are currently under review, the statement said. Imperial Energy is expected to announce details of its IPO plans by late March. Imperial Energy, which produces about 10,000 barrels of oil per day at its deposits in the Tomsk Region, also announced on Monday the appointment of Yekaterina Kirsanova, the head of its Moscow office, as the company's executive director.
Russia brings in new law on foreign officials' financial deals
MOSCOW, January 15 (RIA Novosti) - Russia is tightening its control over financial transactions by foreign officials as a new version of the law on combating money laundering and the financing of terrorism comes into effect on January 15. The law obliges Russian banks, pawn shops, insurers and other organizations to ascertain and record the origins and destinations of monies received and sent by foreign public officials. The same measures also apply to their relatives. According to the Federal Financial Monitoring Service (Rosfinmonitoring), foreign public officials are defined in accordance with clause b, article 2 of the United Nations Convention against Corruption, to which Russia is a party. Under the convention, a foreign public official means any person holding a legislative, executive, administrative or judicial office of a foreign country, whether appointed or elected, and any person exercising a public function for a foreign country, including for a public agency or public enterprise. Andrei Yemelin, vice-president of the Association of Russian Banks, said the new law would narrow possibilities for foreign officials who may be involved in money laundering to carry out transactions through commercial banks. At the same time, Yemelin stressed the need to harmonize Russia's definition of money-laundering with Western standards in order to prevent any legal uncertainty.
Wednesday, January 16, 2008
Russia's energy giants join up for a world conquest
January 14, 2008 – Russia Today – Russian energy companies are forming alliances to obtain licenses for new deposits outside the country. Russia's largest independent oil producer Lukoil has formed a joint venture with Gazprom's subsidiary to participate in overseas tenders. Experts say the Kremlin is encouraging companies to pursue foreign projects to internationalise the economy. Russia's largest independent oil producer, Lukoil, finished last year with profits of $US 8 billion and increased production. The head of Lukoil, Vagit Alekperov, said output of 113 million tonnes was fully covered by new oil discoveries. He said Lukoil sought partners to obtain licenses for the new deposits and to make geological surveys. “We formed a joint venture with Gazpromneft in which Lukoil has a 49% stake. Together we will participate in tenders for deposits, in Russia and abroad, that appeal to both companies,” Alekperov said. Acting alone, Lukoil was less successful last year. It failed to participate in a tender for oil and gas deposits in Libya. That came after Libyan officials arrested the head of Lukoil’s international projects division for commercial espionage. The destiny of another of Lukoil’s overseas projects, the West Qurna-2 in Iraq, remains unresolved. The company obtained the rights to the deposit in 1997, but Iraq has since cancelled all contracts signed during the Saddam era. “I am planning to visit Baghdad and I will also hold talks with the Iraqi oil minister in Davos later this month. The government has not passed the law on oil in Iraq. We hope that when it happens we will get started with the West Qurna-2," Alekperov added. Lukoil is not the only company that seems ready to take risks in order to get its hands on new oil and gas reserves outside Russia Energy giant Gazprom has proposed investing up to $US 2.5 billion in Nigeria’s economy in exchange for access to its mineral reserves. Chris Weafer of Uralsib Financial Corporation says the Kremlin is encouraging Russian energy firms to operate overseas in an effort to internationalise the economy. “We definitely expect to see Gazprom, Rosneft – companies like that – becoming more settled on global energy markets. This is something the Kremlin is specifically targeting,” Weafer said. Experts say that as soon as companies like Gazprom and Lukoil become more involved in international projects, foreign energy firms are more likely to participate in production in Russia.
Oil independent focuses on refining
January 12, 2008 - Russia Today - Russia's largest independent oil producer, Lukoil, finished last year $US 8 billion in profit. That's according to its preliminary operational results. While the company managed to increase production of crude, it also boosted exports of its refined products. The head of Lukoil, Vagit Alekperov, said the company pumped 113 million tonnes of oil last year. That output was fully compensated by newly-discovered oil deposits. Lukoil’s crude oil exports dropped by 2 per cent as the company turned its focus to refining. “The volume of crude oil that we export fell in 2007 because of the Russian government's taxation policy. And we think that is justified because it’s more efficient for companies to refine in Russia than to export crude oil. Last year Lukoil increased its exports of refined products by 7 per cent”, Alekperov said.
Rosneft sells $3.5bn worth of assets to Gazprom Neft
01–16–2008 – RBC News – Rosneft, Russia’s leading oil company, said it had sold $3.534 billion (RUB 88.18bn) worth of assets to Gazprom Neft in December 2007, including 50 percent stakes in Tomskneft VNC and Strezhevsky Oil Refinery, Rosneft said in its US GAAP report for nine months of 2007. The assets were sold to Gazprom Neft as a single lot, and it was difficult to say how much Rosneft received for its stake in Tomskneft, Rosneft’s press office told RBC. The assets sold in December also include a number of smaller facilities in Western and Eastern Siberia. This means that Rosneft sold the Tomskneft stake cheaper than had been expected ($3.66bn). On December 27, Rosneft and Gazprom Neft announced the completion of the acquisition of a 50 percent stake in Tomskneft VNC by Gazprom Neft. Rosneft’s Neft Aktiv sold the stake to Gazprom Neft’s subsidiary, Gazpromneftfinance. The transaction value had not been disclosed. Rosneft purchased Tomskneft at a YUKOS bankruptcy auction in May 2007. On July 2, Rosneft announced that it had sold a 50 percent stake in Tomskneft to Vnesheconombank. On the same day, Rosneft purchased $3.4 billion (RUB 87.58bn) worth of YUKOS’s assets from Prana LLC. According to Rosneft’s investment memorandum, it received the same money for the Tomskneft stake from Vnesheconombank. However, on July 12, Vnesheconombank Chairman Vladimir Dmitriyev said his bank had not acquired the 50 percent stake in Tomskneft. A source in Rosneft confirmed later that the bank “withdrew from the deal at a certain stage”, without further details. Rosneft’s net profit for the third quarter of last year climbed 80 percent compared with the same period of 2006, to $1.89 billion, in accordance with US GAAP standards, and 75.3 percent less than in the second quarter of 2007. Rosneft’s Q3 revenue was up 53.5 percent at $13.742 billion, and EBITDA jumped 82.8 percent to $4.023 billion.
Oil Firm, Refiner in $2.5Bln Merger
January 16, 2008 - The Moscow Times by Anatoly Medetsky - Oil producer West Siberian Resources on Tuesday agreed to merge with Russian refiner Alliance Oil to create a $2.5 billion company where the majority interest will belong to Alliance's Kremlin-friendly owners. The deal continues a trend for oil producers -- be it smaller companies like WSR, controlled by a Russian businessman and traded on the Stockholm Stock Exchange, or industry champions like Rosneft -- to seek higher margins in refining. Bermuda-registered West Siberian Resources hopes that the partnership with the three government-friendly Bazhayev brothers, who own Alliance and will take 60 percent in the new company, will insulate it from political risks on the market, which is closely watched by the Kremlin, WSR managing director Maxim Barsky said in a conference call to investors. West Siberian Resources has been snapping up production units since 2004, expanding the company like Mikhail Gutseriyev did with his Russneft before it fell foul of the Kremlin last year. Prime Minister Viktor Zubkov inspected Alliance's prime asset, the Khabarovsk refinery in the Far East, last month and blessed its ongoing $800 million upgrade, Barsky said. The Bazhayevs, who come from Chechnya, also donated $50 million to the government for the rebuilding of the republic, Barsky said. "We have a very good political position," he said. In a sign of unclouded relations, the Kremlin named one of the brothers, Mavlit, to sit on the Public Chamber, a body that was designed to exercise public oversight of officials. The Kremlin, however, did not reappoint him in a recent member rotation. A spokeswoman for the company declined immediate comment and did not respond to e-mailed questions Tuesday. The merger will create a modest company that will, by reserves, trail two other foreign oil companies working in Russia independently, Imperial Energy and Sibir Energy, said Anton Konchin, an analyst at UniCredit Aton brokerage. West Siberian Resources, which will give its name to the merged company, has reserves of 307 million barrels, while Alliance has 123 million barrels in its fields in Tatarstan and Kazakhstan. The new company will have a market worth of $2.5 billion, produce 51,000 barrels per day and will expand to 90,000 by 2011, Barsky said. WSR current shareholders will have 40 percent of the new company, the company said in a statement. Alliance's refinery was the last available privately owned refinery with large capacity in Russia, Barsky said. It is able to refine 70,000 barrels per day and will produce better quality fuel starting in 2011 when the upgrade ends, he said. Among the reasons for the deal, Barsky named the heavy Russian taxes on oil production and export that encourage refining; growth of local fuel consumption; and higher fuel prices in the Far East due to the long distance from the country's main oil production and refining facilities. West Siberian intends to reduce the cost of transporting the crude to Khabarovsk by swapping its oil for the oil that is produced closer to its refinery by companies such as Surgutneftegaz, Barsky said. The new company will also operate 255 gas stations and 24 oil products terminals in the Far East, Barsky said. After the merger -- which needs to be approved by the companies' boards, WSR shareholders and Russian regulators -- the company's depositary receipts will continue to be traded in Stockholm and it will inherit senior managers from the current WSR, Barsky said. The companies intend to complete the merger in the first quarter of this year, he said. WSR's major shareholder is Alltech Investments, controlled by Dmitry Bosov. WSR did not disclose the size of Alltech's stake Tuesday. Another large owner is Spanish oil and gas company Repsol YPF, which owns 9.2 percent. WSR had a net profit of $30.2 million in 2006, while Alliance Oil had net profit of $101.63 million that year. Synergy created by the merger could push the combined profit up by 10 percent to 20 percent, said Timur Khairullin, an oil analyst at investment company Antanta Capital. The deal continues a trend toward consolidation on the market, he said. "There are increasingly fewer players, but they get larger," he said.
Russian Alliance oil firm, Swedish West Siberian Resources to merge
MOSCOW, January 15 (RIA Novosti) - The Russian oil company, Alliance, and Sweden's West Siberian Resources announced on Tuesday their plans to merge to form a vertically integrated company. Alliance and West Siberian signed on January 15 a memorandum of understanding to create a leading independent oil company with a mix of upstream and downstream businesses in key oil-producing regions in Russia. Under the merger agreements that the parties intend to sign, Alliance will become a wholly-owned subsidiary of West Siberian. Alliance, which runs an oil refinery in the Russian Far East, and West Siberian, which develops oil deposits in west Siberia, will together own proven and probable oil reserves of 430 million barrels, with a production capacity of about 51,000 bpd and a refining output of 70,000 bpd as well as 255 filling stations. The companies said in a joint statement that their combined market capitalization would amount to $2.5 billion, while revenues for the first nine months of 2007 were estimated at $1.4 billion.
Russia ready for greater foreign investment in oil and gas projects
MURMANSK, January 11 (RIA Novosti) - Russia is ready to consider greater foreign participation in oil and gas projects, including on its continental shelf, a first deputy prime minister said on Friday. Dmitry Medvedev, who chairs the board of energy giant Gazprom, told journalists in northern Russia: "We are an energy power and must think about the future. We must invest funds into this sphere. We have our own funds, but we are ready to discuss these issues with foreign investors." "We have very good positions on the continental shelf. We are interested in developing them on a priority basis," Medvedev said. The first deputy premier, who is likely to be elected Russian president in March having been picked last month by Vladimir Putin as his favored successor, said that on energy issues the country's leadership would like to retain the right to make all key decisions itself. Russia's Natural Resources Ministry said in late December six major investment projects, being implemented on the basis of tenders, could attract 800 billion rubles ($32.5 billion) in funding. The ministry has worked out a number of amendments to a bill on oil, gas and mining, which will determine a procedure for drawing up lists of deposits to be offered for development as part of investment tenders. "After the bill is approved, we plan to lease at least six deposits. This will help to attract investment of 800 billion rubles ($33 bln) in these projects and to create 31,000 jobs," the ministry said in a statement. The bill sets out criteria and procedures for classifying deposits as strategic. These will include oil fields with reserves of more than 70 million metric tons (513 million bbl), natural gas deposits with over 50 billion cubic meters, gold deposits with more than 50 metric tons, copper deposits with over 500,000 metric tons, and all continental shelf deposits.
Wednesday, January 09, 2008
Yukos saga enters final chapter
January 9, 2008 – Russia Today – One of the most memorable events of 2007 was the demise of what was once Russia’s largest oil company - Yukos. Although its fate was pretty much sealed in late 2003, with the arrest of its head Mikhail Khodorkovsky, it wasn't fully dissolved until 2007, when its assets went under the hammer and local stock exchanges stopped trading its shares. The Moscow Arbitration court declared Yukos bankrupt on August 1, 2006, after three years of relentless litigation with the tax authorities. Back then, Yukos' external supervisor Eduard Rebgun said the company made no effort to rescue itself: “If Yukos wanted to save itself – it could have done so. But I failed to see any opportunities for recovery during our financial analysis. I am supposed to defend the interests of the creditors and of society as a whole,” Rebgun said. Some observers say last Spring's bankruptcy auctions of Yukos assets were rigged. Yukos board chairman Viktor Gerashchenko said the fate of the assets had already been decided. “Apart from Rosneft there was another company, which entered the auction under specific conditions and reasons, but did not actually do anything. I think this company could have pushed up the sale price and Rosneft would have had to respond and the auction would have been more interesting. But what happened is really a back room deal,” Gerashchenko said. State-owned Rosneft snapped up the bulk of Yukos' assets at these auctions, including its production units, refineries and even its headquarters in the centre of Moscow. And the acquisitions were quickly reflected in Rosneft’s balance sheet. The company reported stronger-than-expected results in the second quarter of 2007. Its net profit jumped a whopping 49% year-on-year. Artyom Konchin, analyst of Aton Unicredit, says it's no surprise that Rosneft has gone from strength to strength. “Rosneft has an amount of ex-Yukos assets plus does no longer have to pay refining tolling fees which it used to pay to the refineries previously owned by Yukos,” Konchin said. Rosneft, now Russia’s largest oil producer, will continue demonstrating impressive growth, because it has just finished consolidating all the Yukos assets. But its head, Sergey Bogdanchikov, says acquiring Yukos assets has its challenges. “Along with the Yukos assets we acquired their liabilities, which have increased Rosneft’s totals debt to $US 26 billion. Although this does not affect our ability to function, we plan by 2010 to reduce our debt, as a percentage of total assets, to 30%. We will then be in line with Russian and international standards,” Bogdanchikov said. Yukos had paid off more than $US 28 billion to its creditors by selling assets at auction. It also defaulted on $US 3 billion worth of debt. Although Yukos has all but disappeared from Russia’s business landscape, hundreds of Yukos petrol stations around the country are still waiting to be re-branded.
Russia's Tatneft to Increase Oil Reserves
27.12.2007 [Neftegaz.RU] - Russia's oil company Tatneft announced it was going to increase its oil reserves in 2007. With proven oil reserves of 3.6 billion barrels, Tatneft accounts for over 80% of oil output in the Russian Republic of Tatarstan. Now the company plans to rise its annual oil output to 25.4 million metric tons in 2008-2010.
Russia to raise oil export duties to record $333.8 per ton
MOSCOW, December 29 (RIA Novosti) - Russia will raise oil export duties by $58.4 to $333.8 per metric ton from February 1, in line with global market trends, a senior Finance Ministry official said on Saturday. The Russian government adjusts export duty on crude and petroleum products every two months, depending on changes in the Urals blend price on world markets. "We are reaching an all time record for oil duty on exports, equal to $333.8 per ton on February 1," said Alexander Sakovich, deputy head of the ministry's customs department. The official also said that from February, 1, 2007, export duties on light petroleum products will be set at $237.2 per ton, against the current $197.8 per ton. Duty on heavy petroleum products will rise to $127.8 per ton from the current $106.6 per ton. The Russian budget received over 1.2 trillion rubles ($48.9 billion) from oil export duties in 2006, while budget revenue from oil exports is estimated to reach nearly 1.3 trillion rubles ($53 billion) in 2007.