MOSCOW, August 22 (RIA Novosti, political commentator Peter Lavelle).
With natural gas giant Gazprom close to sealing a deal to purchase Sibneft, stated-owned Rosneft may be reconsidering its strategy to become Russia's number one oil producer.
Instead of raising cash through an IPO next year, Rosneft may form a strategic alliance with Kremlin-friendly Surgutneftegaz, thereby bringing to an end Russia's oil wars.
Gazprom and Sibneft refuse to comment on the impending deal in public, but there is evidence that Gazprom has been actively buying Sibneft's free float and has accumulated over 3% of the company's stock. This 3%, coupled with the purchase of 72% of Sibneft from core shareholders - Roman Abramovich's Millhouse - will give Gazprom a super-majority in the company and ensure that competitor Rosneft will be effectively shut out as a blocking minority shareholder.
Earlier it was rumored that Gazprom was negotiating the purchase of 92% of Sibneft, who would recover 20% of its shares which were frozen due to criminal investigations related to the Yukos affair and the failed Yukos-Sibneft merger. Now, it appears that Gazprom feels confident that it will be able to capture Sibneft without the frozen shares and a nasty legal confrontation with Rosneft.
Rosneft, finally accepting that Sibneft will be brought into Gazprom's portfolio, and facing difficulties raising funds for other asset purchases, may change its strategy. Rumors have been circulating that Rosneft may abandon its plan to sell equity in an IPO in order to raise cash next year, and seek to establish a strategic relationship with oil giant Surgutneftegaz.
Kremlin-friendly Surgutneftegaz would be an ideal partner for Rosneft. Surgutneftegaz is believed to have provided Rosneft with financial support to take control of Yuganskneftegaz from Yukos at the end of 2004. Surgutneftegaz is also sitting on top of a huge cash pile estimated at well over $10 billion. For years, analysts have speculated that Surgutneftegaz has been mulling the acquisition of additional Russian oil assets, most notably the purchase of Sibneft.
With such a cash-flushed partner, Rosneft would be able to pursue its ambitious expansion drive, and the targets of that expansion are very obvious. Samaraneftegaz and Tomskneft, Yukos' two remaining large production units, have little - if any - political protection. With Sibneft taken off its shopping list, Rosneft must be already eyeing Samaraneftegaz and Tomskneft, as there are really no other places to look within Russia.
Given the competing energy lobbies in the Kremlin - Dmitry Medvedev, (Vladimir Putin's chief of staff and a Gazprom board member representing Kremlin liberals), and Rosneft board member Igor Sechin (Medvedev's deputy, representing hawks hailing from the security forces) - Rosneft may win its bid to eventually capture Yukos' remaining assets.
The assumption that Rosneft will eventually acquire Yukos' remaining assets falls in line with the recent win-lose record of the two energy lobbies. Gazprom twice lost out on its bid to acquire Yugansk during the forced break-up of Yukos. Rosneft has failed twice to acquire Sibneft's frozen shares. Gazprom appears to have won its bid to acquire Sibneft. To maintain the political balance in the Kremlin, it is now Rosneft's turn to win.
Russia's oil wars are close to a conclusion. What started as the Kremlin's strategy to re-assert state control over Russia's oil patch with the attack against Yukos, is about to end with two competing state-owned national energy champions. This was most likely not the Kremlin's original design, but the end result is probably more than acceptable for those behind Gazprom and Rosneft.
The opinions expressed in this article are those of the author and may not necessarily represent the opinions of the editorial board.
