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An Offer He Couldn’t Refuse: Rosneft CEO Agrees to Buy a Stake in Taas-Yuryakh

This is an abridged version. The full text is avaiable to subscribers to The Russian Energy weekly.

Rosneft is overpaying for 35.3% of interest in Taas-Yuryakh Neftegazdobycha (TYN) it has bought from Sberbank, industry watchers claim. The state-controlled company can still compensate for the loss if is persuades the other shareholders to sell their stakes at a discount. The chances are good, as the Yakutian operator’s reserves are hard to recover. 

A Canny Banker 

CEO of Sberbank German Gref has performed a miracle of administrative flexibility to get rid of oil assets, which were a cumbersome entry on the bank’s balance sheets for several years. By the end of 2011 he managed to return a reduced rate of the oil export tax for the Dulisma field in Eastern Siberia (Deputy Prime Minister Igor Sechin had canceled this fiscal advantage last summer.) It enhances the looks of the Dulisma project the bank is trying to sell.

In February Gref made another coup. He reported that Sberbank was selling 35.3% of TYN, the owner of the license to the Srednebotuobinskoye field in Yakutia. The field is estimated to contain 129.8 mln t of oil and 157.1 bcm of gas, but development promises to be difficult. In 1976- 1987, seven underground nuclear devices were exploded on the block, allegedly to enhanced oil recovery.

‘We have ceded this stake without a discount,’ Gref said after the sales agreement was signed. ‘The sum consists of the current cost of the asset plus maintenance and administrative expenses.’ But does the sum, totaling $444 mln, equal the value of the asset on the market? Analyst of BCS Service financial group Andrei Polishchuk is not so sure. ‘The price is an exaggeration,’ he insists.

Officials of Bashneft, who had eyed the same asset earlier, have come to the same conclusion, but Rosneft appears to be perfectly satisfied with the price. ‘The deal has been made on direct orders from the government,’ an official of a state-backed company told RusEnergy. ‘Gazprom Neft was another possible buyer but its managers managed to keep away. Rosneft resisted for a long time but Gref was a better player.’ 

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