Russia 090421 Basic Political Developments

TNK-BP Announces a Senior Appointment

http://www.tnk-bp.com/press/releases/2009/4/108/
April 20, 2009, Monday

TNK-BP today announced that Francis Sommer has been appointed Executive Vice President, Technology of the TNK-BP group of companies. 

Francis has been with TNK-BP since 2005, as Vice President, Technology. He has played an important role in technology transfer to TNK-BP, and has been instrumental in establishing a consistent approach to the evaluation and quantification of reserves across TNK-BP’s asset base. He joined TNK-BP following a successful and varied petro-technical career of almost twenty years in BP, in the UK, USA and Colombia. 

The appointment takes effect immediately.

“Francis has brought the wealth of his technical experience as a respected petroleum engineer to TNK-BP, managing a talented team of our technical experts, and I look forward to his further contribution in his new role,” said Tim Summers, Chief Executive Officer of TNK-BP.

Rosneft keeps mum over Sibir talk

http://www.upstreamonline.com/live/article176241.ece

News services

Russian state-run producer Rosneft has refused to comment on reports that it is considering bidding for AIM-listed Sibir Energy.

A report in yesterday's Sunday Times said Rosneft was understood to have contacted Sibir regarding a possible bid for the company.

The London-based newspaper, which did not cite its sources for the report, also wrote that Merrill Lynch had carried out a valuation of Sibir in anticipation of forthcoming offers.

Last week, the Sunday Times reported that German Khan, a large shareholder and key executive at TNK-BP had canvassed Sibir investors to accept a £6 ($8.88) per share bid.

Sibir then said it had not received any direct offers from rivals.

The company's shares were suspended in February after it was discovered it was owed $325 million by its 23.5% shareholder Shalva Chigirinsky.

The Sunday Times also reported Chigirinsky had agreed to sell $350 million worth of his personal assets, including a French villa, in order to repay debt.

The newspaper did not say where it obtained this information.

Monday, 20 April, 2009, 07:22 GMT  | last updated: Monday, 20 April, 2009, 07:22 GMT

Tchigirinski to sell his villa to settle debt to Sibir Energy

http://businessneweurope.eu/users/subs.php

Rencap, Russia

Monday, April 20, 2009

The Sunday Times reported over the weekend (18-19 Apr) that Sibir Energy and one of its key shareholders Shalva Tchigirinski (who holds a 23.3% stake in the company) have agreed that Tchigirinski will sell his private assets (including villa Maria Irina in the south of France and his London house) for $350mn by the end of the year in order to settle his debt to the company. The respective agreement has not yet been signed.

Our rating for SEB remains under review pending the results of an internal investigation regarding an unauthorised cash withdrawal from the company, and resumption of shares trading.

The total size of Tchigirinski's debt is unclear to us, as is the value of his real estate portfolio. The latter must have declined substantially in the recent months, given the adverse market conditions. The English High Court recently granted a worldwide freeze order under which Tchigirinski is prevented from disposing of his assets to the extent the value of his remaining assets falls below GBP250mn. By signing this deal with Tchigirinski, SBE is trying to secure its position in front of his other creditors, in our view.

From The Sunday Times

April 19, 2009

Oligarch Chalva Tchigirinski to lose Monaco palace

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6122232.ece
Danny Fortson

THE Russian oligarch at the centre of a shareholder loan scandal at Sibir, the London listed oil company, has agreed to sell $350m worth (£237m) of his personal assets, including a stunning $250m villa in the south of France, to repay the debt. The agreement was hammered out over the past week by lawyers for Sibir and Chalva Tchigirinski, Sibir’s largest investor. Details of the deal emerged as another bidder surfaced for the stricken company. Rosneft, the Kremlin-owned oil giant, is understood to have contacted the company about making a bid. Igor Sechin, chairman of the company and also deputy prime minister of Russia, is leading the talks.

TNK-BP has also been sounding out investors about their willingness to sell. Merrill Lynch was this weekend carrying out a valuation of the company in anticipation of forthcoming offers.

Shares in Sibir, once the most valuable company on London’s junior AIM market, have been suspended since February when it was revealed that the company had loaned $325m to Tchigirinski. Since then it has been working to recover the money. An internal investigation, led by Ernst & Young, has since found that between $328m and $400m in company funds have been allegedly misappropriated. The asset sale means that Sibir will likely be able to recover some if not all of the missing money. Under the memorandum of understanding, the Moscow property tycoon has until the end of the year to sell $350m-worth of personal assets to repay the money owed to the company. Among the assets included in the agreement are the palatial Villa Maria Irina in Cap Martin. The clifftop property overlooking Monaco is valued at $250m, making it one of the most expensive residences in the world and includes its own helipad and an Olympic-sized swimming pool. Tchigirinski has also agreed to sell a £14m house in Eaton Square, Belgravia.

The deal removes a cloud hanging over a company that operationally is performing well and could prompt potential bidders, who have shied away from making formal offers because of the uncertainty over the missing money, to come forward. Sibir’s main assets, the Salym oilfield in Siberia and a Moscow refinery, are highly prized.

Its corporate reputation is in tatters however. Earlier this month the Sibir board fired chief executive Henry Cameron, who had approved the loans, and started High Court proceedings against him and Tchigirinski. The latter and his business partner, Igor Kesaev, each own 23.5% of Sibir but Tchigirinski pledged the shares as collateral for outstanding loans from Sberbank.

The Kremlin-controlled bank now holds the 47% stake as collateral. Another 18% of the company is owned by the City of Moscow. Analysts believe that once the smoke clears Sibir will end up in the hands of a Russian buyer. Analysts at JP Morgan Cazenove valued the company in February at 400p per share, or £1.5 billion.

Gazprom

Gazprom saving energy

http://www.barentsobserver.com/gazprom-saving-energy.4581677-116321.html
2009-04-20

The Russian economy can easily save up to 100 billion cubic meters of gas per year if energy efficiency measures are taken, a Gazprom representative said. Today, the Russian economy is more than 50 percent dependent on gas supplies.

More efficient use of energy is top priority for Russia, Gazprom’s Oleg Aksyutin said in a recent conference, a company press release reads.

Mr. Aksyutin underlined that the Russian economy’s energy consumption is far above the world average and highlighted that energy-saving measures are of the highest significance for the national economy.

He maintains that alone measures like the more efficient use of gas turbines and the introduction of new technology in the housing sector would help Russia save more than 90 billion cubic meters. The company representative also maintained that Gazprom itself over the last seven years has saved 20,8 billion cubic meters of gas following energy efficiency measures.

Gazprom Neft Plans $299M Bond

http://www.themoscowtimes.com/article/1009/42/376356.htm
20 April 2009 Bloomberg
Gazprom Neft said Friday that it was selling 10 billion rubles ($299 million) of bonds in its debut offering of domestic debt.

The 10-year notes, which will be listed on the MICEX on Tuesday, have a coupon of 16.7 percent and a put option giving bondholders the right to redeem the notes after two years, Gazprom's oil unit said in a statement.

The sale, managed by Renaissance Capital and Gazprombank, is the oil company's first in rubles. Gazprom Neft has $5.8 billion of loans outstanding, including $1.5 billion due this year.

Gazprom Neft said it would use the proceeds for "general corporate purposes." The company received orders for 25 billion rubles of bonds from investors, it said.

Ruble bond sales fell 51 percent in the first quarter to 43.5 billion rubles from 88.9 billion rubles in the same period in 2008.
Gazprom Raises $2.25bn in record bond placement

http://businessneweurope.eu/users/subs.php

Unicredit, Russia

April 20, 2009

Gazprom raised $2.25bn in 10-year bonds, with a coupon of 9.25% (the lower end of the range), $0.25bn more than originally planned, as the issue was oversubscribed to, Vedomosti reports. The funds raised are to be used to refinance a Credit Suisse loan.

We see the success of the placement as a positive catalyst for Gazprom's equity and mildly positive for the Russian market as a whole, as it suggests investors are increasing their risk tolerance towards Russian companies, although generally focusing larger companies for the time being. We also see the news as an indication of investor confidence in Gapzorm settling or refinancing its $10bn in debt due in 2009. We also note that with this deal Gazprom is refinancing a loan with an interest rate of 5.25% with bonds yielding 9.25%, which seems justifiable under the currently distressed debt market conditions.

Gazprom, Shell, Oando make $30bn Gas Master Plan shortlist

http://www.punchng.com/Articl.aspx?theartic=Art20090421258914
By Obinna Ezeobi, Abuja

Published: Tuesday, 21 Apr 2009

Russian gas giant, Gazprom, British Gas and Anglo Dutch Shell were among the top 15 oil and gas companies unveiled on Monday by the Federal Government, as the potential investors that will continue in the prequalification process for the $30bn Nigeria Gas Master Plan.

Other companies picked from the initial 46 that responded to government’s invitation for Expression of Interest included Centrica from Britain, EoN Rhugas from Germany, Stat Oil Hydro from Norway, and US oil giant, Chevron.

Two Spanish firms, Union Fenosa and Gas Natural as well as Gail from India and Thailand’s oil and gas conglomerate, PTT also made the list.

South Korean firm, Kogas also made the list completed by Global Energy/Hanover and indigenous firms, Oando and Sahara Energy.

Speaking at the briefing session with the successful 16 companies in Abuja, the Group General Manager/ Special Technical Assistant to the Group Managing Director of the Nigerian National Petroleum Corporation, Dr. David Ige, said the companies would be expected to form a consortium among themselves that would be evaluated once again and announcement of bid winners made before end of October, 2009.

He explained that selection at this stage would depend on the consortium’s credibility, viable technical design, compliance with local content and social development plan.

Ige said that the successful consortium must co-opt strategic co-investors, incumbent international oil and gas companies, marginal field operators and have equity thresholds of 10 per cent owned by an indigenous company and five per cent by the host state government.

“The consortiums would rank on their proposed tariff for processing gas; the capacity of the processing plant they will have by January 2012, and the consortium with the lowest tariff and largest capacity availably by 2012 will considered the best,” Ige further stated.

Earlier in his speech, Minister of State for Petroleum, Mr. Odein Ajumogobia, said the successful companies would be the definers of the new Nigerian gas industry.

He added, “The purpose of the exercise is to identify those who have the capacity to lead the nation through the uncertainty that defines the sector currently to one which is fully structured, in return, you get the benefits of incumbency which will apply to you as first movers.

“The opportunities would challenge your entrepreneurial capacity, but the reward would be great for those who win. Winners would be those who demonstrate capacity to deliver at speed and make a major impact on gas flares as well.

“In addition, they must demonstrate innovation in cost effectiveness and risk management.”

The minister further stated that Nigeria gas industry had a demand outlay of over 15 billion cubic feet of gas per day from the domestic, regional and export markets.

He said, “A gas backbone infrastructure is desperately needed to enable the realisation of that market.

“The GMP envisions a hub, and dispatch of gas infrastructure model, comprising a network of gas gathering and processing hubs which feed dry gas into a network of three downstream transmission lines that feed all three possible markets.

“The speed with which the infrastructure is required is high, so also is the cost at which it would be delivered. The Federal Government, through the current Joint Venture structure is clearly unable to fund such massive expansion.

“In addition, a broad and diversified landscape with different types of players needed to be entrenched to enhance efficiency and competition in supply,” he said.

In his presentation, the GMD, NNPC, Dr. Mohamed Barkindo said the corporation would be evaluating the 15 investors to identify those with which there is mutual alignment in strategies and for which a partnership was possible.

Caspian Gas - we need to get much smarter to outsmart the Russians (Part 2)

http://www.glgroup.com/News/Caspian-Gas---we-need-to-get-much-smarter-to-outsmart-the-Russians-(Part-2)-37742.html
Monday, April 20, 2009

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  Analysis by: Leigh Bolton
  
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  Analysis of: Is the EU in danger of losing Azeri gas? | www.europeanvoice.com
  
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  Source: www.glgroup.com
  

Implications:

Russia and Gazprom have once again circumvented an uncoordinated and lack-lustre EU activity in the region and managed to hammer home one of the last nails in the coffin of Nabucco pipeline.

Analysis:

In Guiseppe Verdi’s 1841 opera “Nabucco,” the Babylonian king destroys Jerusalem and takes the Jews captive; goes mad and then regains sanity; then begs the God of the Hebrews for forgiveness and lets the Jews go. Apparently, someone named Europe’s proposed “strategic” southern gas corridor pipeline project after this classic Italian masterpiece. We are still in the “mad” stage of this project however.

I unashamedly quote an excerpt from a March article (Energy Tribune) by Peter Glover that describes the situation perfectly - The $10 billion Nabucco pipeline story reads like a Bourne-style political thriller. Since its conception in the early 1990s the project’s narrative has been full of international intrigue geared to helping Europe plot its escape from the ‘tyranny’ of Russian energy supremacy. But almost two decades on we are still not at chapter one and the future remains uncertain, spawned in intrigue, in no small part due to the sabotaging efforts of the EU’s anti-Nabucco “fifth column”: Germany - We have had the “Identity”, are moving into the “Supremacy” and in future years Europe will feel the “Ultimatum”!
Back in December 2007 I wrote a GLG analysis describing how Gazprom had totally out-maneuvered the EU in “tying up” gas supplies from Turkmenistan. Well, they’ve done it again but this time with supplies from Azerbaijan. Gazprom’s political rapprochement with the Azeri government and their deft negotiating has now “robbed” the chance of further Azeri gas for Europe’s proposed Nabucco pipeline. With the fate of Nabucco now hanging by a thread any major Nabucco gas supply for the future must now come from Iran to give it any chance of development.  
Russia and Gazprom have once again circumvented both a “lazy” and uncoordinated EU activity to secure substantial Azeri gas supplies for Nabucco. The whole Caspian region in terms of both oil and gas is in a three-way competitive race between Russia, China and the EU and the winners may well be in this order ………….. with Russia winning easily.