The merger of OAO Gazprom and OAO Rosneft is expected to be finalized early this year, and the assets of OAO Yukos unit Yuganskneftegas will not be involved in the initial consolidation as was earlier reported, a Russian official said.
Russian Industry and Energy Minister Viktor Khristenko posted a commentary on the ministry's web site Dec. 30 addressing news reports that the merger would be delayed. Kristenko
also suggested that a Chinese company might buy into Yuganskneftegas, but one analyst told OGJ that he doubts that will happen.
Previously, Russian Economic Development and Trade Minister German Gref told reporters that the Gazprom-Rosneft merger would be delayed temporarily (OGJ Online, Dec. 29, 2004).
But Khristenko said Yuganskneftegas will not be among the assets being consolidated. "The consolidation of Gazprom and Rosneft assets is proceeding in a planned fashion and will be completed in January 2005 in accordance with the decisions made," he said.
Khristenko's comment echoed that of Dmitry Medvedev, Gazprom chairman, regarding the Yuganskneftegas assets.
Yuganskneftegas
In September, Rosneft announced that it would become a Gazprom subsidiary. Following a swap of Gazprom and Rosneft stock, the state's stake in Gazprom is slated to increase to 50% from the current 39% stake, analysts have said.
Khristenko said on Dec. 30 that the state, as the majority Gazprom shareholder, has no intention of increasing its direct participation above the controlling stake.
"Yuganskneftegas assets will be set aside and handed to a separate company 100% owned by the state," Khristenko said. "Up to 20% of this company's shares may be offered to China National Petroleum Corp."
CNPC spokesman Li Runsheng from Beijing told CNN Money that he had no definitive reply to Khristenko's comment. "This is their one-sided comment. We honestly can't give you a definitive reply. About what they said, we really can't understand," he said.
Yukos, Russia's key oil supplier to China, still has remaining oil units from which Russian Railways officials have said that they expect that Yukos will continue supplying oil to China.
Oil traders meanwhile have expressed concerns about Russia's oil exports, given the Yukos controversy.
Last month, Rosneft announced its acquisition of Baikal Finance Group, giving Rosneft control of Yuganskneftegas. BFG bought Yuganskneftegas at a Dec. 19 auction conducted by the Russian government (OGJ Online, Dec. 23, 2004).
BFG bought 77% of Yuganskneftegas for $9.37 billion. No Western companies were involved in the bidding, and Gazprom also did not submit a bid. Rosneft has not said how much it paid for BFG, whose only asset is Yuganskneftegas.
On Dec. 31, bailiffs escorted Rosneft executives to Yuganskneftegas's office in Nefeyugansk, Siberia.
Yukos CEO Steven Theede said the state-owned Rosneft is expropriating Yukos assets "without abiding by Russian law and in violation of all international legal and business norms of fair and decent conduct."
Once Russia's most aggressive oil company, Yukos faces billions of dollars in delinquent tax claims. The company's problems began with the Oct. 25, 2003, arrest of Mikhail Khodorkovsky, its former chief executive, on fraud and tax evasion charges.
On Dec. 14, Yukos filed a petition for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of Texas, Houston Division (OGJ Online, Dec. 15, 2004). As of presstime, a bankruptcy court hearing was slated for Jan. 6.
CNPC
Michael Lelyveld, senior advisor to PFC Energy, said it was "hard to believe" that CNPC would get involved with Yuganskneftegas.
"I can't imagine that CNPC wants to be vulnerable to a lawsuit," he said, referring to earlier comments from Yukos that it will sue anybody having anything to do with the attempted transfer of its shares out of Yuganskneftegas.
Lelyveld noted that CNPC can afford to invest in Russia, but it probably wants to avoid an international lawsuit.
"CNPC would love to get involved in Russian oil, but I think it wants to get involved in uncomplicated Russian oil," Lelyveld said from his Lexington, Mass., office. PFC Energy is based in Washington, DC.
Meanwhile, Russia "made a big show of not being concerned about the legal implications of a ruling in the US court. Russia said the court had no jurisdiction, but Russian officials have gone to great lengths to avoid any possible negative consequences of the ruling," Lelyveld said. "They tried to structure this so that Rosneft would be out of reach as the buyer. It's not clear to me that Rosneft is out of reach."
OPEC News Agency reported Dec. 30 that Russia's crude oil output for 2004 is expected to total 9.3 million b/d, up 9.2% from 2003. The Russian government estimates the country's oil output will grow to 11.2 million b/d by 2015, OPECNA said.
"Preliminary government estimates suggest that in order to achieve this goal, up to $140 billion will need to be invested in Russia's oil sector from 2005 to 2015," OPECNA said.
Rosneft
In related news, the Associated Press said Gazprom bought a 49.95% interest in a joint venture to develop fields in the Barents and Pechora seas from Rosneft. Gazprom also bought a 50% interest from a Rosneft subsidiary in a joint venture to develop Shtokman gas and condensate field in the Barents Sea and Prirazlomnoye oil field in Pechora Sea.
Gazprom did not disclose financial terms. The Kommersant newspaper reported Rosneft was to receive $1.7 billion by selling its stakes in those properties.
Rosneft reportedly was arranging the financing with which to pay for BFG.