MOSCOW, October 24 (RIA Novosti) ExxonMobil to vie with Gazprom for Sakhalin gas/Severstal set to become the world's second largest metals company/Yukos ousted from Slovak Transpetrol/Rosneft in talks to buy foreign refineries/Two pro-Kremlin candidates simulate inter-party struggle in Samara
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Vedomosti
ExxonMobil to vie with Gazprom for Sakhalin gas
ExxonMobil will be Russian energy giant Gazprom's main competitor on the Chinese market. The American oil major has signed a preliminary agreement for supplies of Sakhalin-I gas to China.
So far, all Sakhalin-I gas has gone to power plants in the Khabarovsk Territory. The first overseas customer of Sakhalin-I may be the China National Petroleum Corporation.
The project's operator, Exxon Neftegas, recently signed a provisional agreement with the Chinese company on the supply of Sakhalin-I gas, according to ExxonMobil spokesman Dilyara Sydykova and a CNPC representative.
A source close to Exxon said the agreement provided for piping the gas: in the event that a final contract with the CNPC is signed, Exxon Neftegas will build a pipeline from Sakhalin to China 500 kilometers long, with a capacity of about 8 billion cubic meters a year.
Not all project participants, however, are agreeing to pipe their gas. State-controlled Russian oil producer Rosneft wants to liquefy gas, Lev Brodsky, chief executive of Sakhalinskiye Proyekty (a Rosneft subsidiary), said recently.
Exxon Neftegas's plans may run afoul of Gazprom. The gas monopoly has already announced it wants to buy all Sakhalin-I gas. Also, the company has its own plans for gas supplies to China.
Gazprom CEO Alexei Miller recently discussed deliveries of Russian gas with CNPC president Chen Geng. "All deliveries of Russian gas should go through one export channel," a Gazprom representative said Monday. He said Gazprom is continuing its negotiations with ExxonMobil to purchase Sakhalin-I crude.
Who the CNPC will choose was not revealed by the company's representative Monday. The company will sign an agreement with the partner that offers the best terms and conditions, said Sergei Sanakoyev, head of the Russo-Chinese Center for Trade and Economic Cooperation.
Alfa Bank analyst Konstantin Batunin said the law on one export channel does not apply to production sharing agreements, so Gazprom has no formal leverage against Sakhalin-I.
Kommersant
Severstal set to become the world's second largest metals company
On Monday, metals giant Severstal announced the terms of its November IPO on Russian and foreign stock exchanges during a presentation ceremony for foreign investors in Moscow.
Frontdeal Limited, controlled by Severstal CEO Alexei Mordashov, will sell the company's shares and Global Depositary Receipts. Analysts said Severstal shares should be priced under their market price, if the IPO is to succeed.
Severstal plans to free-float 25% of its shares, and Mordashov's stake in the company will be reduced from 90% to 75%.
Mordashov said Monday that Severstal would become the world's second largest metals company. The IPO could net the majority shareholder up to $1.7 billion, with Severstal's current market capitalization of $11.4 billion.
However, market players said they are concerned about corporate management and the position of minority shareholders.
"Minority shareholders stopped trusting the principal shareholder after they received nothing from deals with Arcelor and after the consolidation of Lucchini and other assets," Bank of Moscow analyst Dmitry Skvortsov told the paper.
Other analysts said Severstal had a 7.8 price-profit coefficient, while that of Novolipetsk Iron and Steel Works was 7.2. Consequently, Severstal shares should cost less.
Vyacheslav Gundar of Russia's Uralsib Management said Severstal was worse managed than Novolipetsk Iron and Steel Works, and a successful IPO implied a 10-15% discount on current market prices. Consequently, Severstal could receive only $1.5 billion from this IPO.
Biznes
Yukos ousted from Slovak Transpetrol
Eduard Rebgun, the bankruptcy receiver for the assets of the bankrupt oil company Yukos, has initiated a meeting with the Slovak company Transpetrol in a move to change the makeup of the board, three members of which represent the interests of the former Yukos management team.
Administrators friendly to the state-controlled oil company Rosneft and Russian energy giant Gazprom, both of which are eyeing Yukos' major assets, are likely to succeed them. However, they are unlikely to stay long.
Rebgun said the reshuffle is prompted by the need to guarantee the preservation of the company's property, including a stake in the Slovak operator of a network of oil trunk pipelines. Yukos Finance, a subsidiary of the embattled oil company, controls 49% in Transpetrol.
There is a slight risk that Russia will lose its property, said Dmitry Mangilev, an analyst with the Prospekt brokerage. However, a reshuffle is the best way to introduce potential owners of Yukos assets, such as Rosneft and Gazprom, before the official sale of its property.
Still the Russian state-owned companies are unlikely to establish a long-lasting presence with the national Slovak operator. Gazprom has already attempted to oust Yukos from Transpetrol, but the deal, which was approved by Slovakia's anti-monopoly department, was blocked by the country's government, which holds a controlling stake.
"State-owned companies can temporarily replace Yukos managers in Transpetrol, until the official sale of property," said analyst Igor Vasilyev from the Financial Bridge brokerage. "The substitute for the second-largest shareholder should be approved by the Slovak government, which is likely to block a Russian state-owned company."
An assessment of all Yukos assets, scheduled to begin next week, may be completed by year's end. A consortium of five companies selected in a competition should officially complete the assessment by January 19, 2007. "Judging from how fast Rosneft was assessed, the sale of Yukos assets may take place soon after the New Year," Vasilyev said.
Gazeta.ru
Rosneft in talks to buy foreign refineries
Rosneft, a Russian state-owned oil company, has announced its intention to buy into some European oil refineries. It is probably eyeing East European assets. If it plans a large-scale expansion, its spending on new acquisitions may exceed $16 billion, experts told the paper.
Until now, the only Russian company seriously expanding on the European refining market has been LUKoil, the country's largest oil producer, which owns refineries in Bulgaria and Romania.
"Considering Eastern Europe, this region is more logistically interesting for the company than the West," said Alexei Kormshchikov, analyst with Uralsib.
However, although expansion to Europe makes sense, observers point out that earlier Rosneft's priority was the Asia-Pacific region.
"Rosneft is better prepared to expand in Asia and to cooperate with Korean and Chinese companies," said Konstantin Cherepanov of Ray, Man & Gor Securities. "While it can solve problems with Chinese companies on a government level, since China controls its oil sector, state support may not work in Europe."
Earlier Rosneft opted not to acquire assets in Europe, fearing lawsuits from Yukos shareholders, who claim that the state-owned company's acquisition of their former core production unit, Yuganskneftegaz, was illegal and are seeking damage recovery in court. Having no property outside Russia, Rosneft was able to ignore these litigations. Some experts believe this is why Bosnian refinery Bosanski Brod will be bought by Zarubezhneft, which can later hand it over to Rosneft.
There is still a risk of action on the part of Yukos shareholders, but it is a minor one, experts say. "Of course, a court may find the shareholders' demand legal and arrest the state company's property," Cherepanov said. "But this is very unlikely."
"So far, lawsuits against Rosneft have ended in nothing," Kormshchikov said. "I do not think the company fears legal action on the part of Yukos shareholders any longer."
Moskovsky Komsomolets
Two pro-Kremlin candidates simulate inter-party struggle in Samara
A political masquerade. That is the best description of the outcome of the recent mayoral election in Samara, in which a United Russia representative was replaced by a candidate from the Party of Life. It cannot be denied that power in a large Russian city was transferred democratically. Yet both parties, one led by the upper chamber's speaker, Sergei Mironov, and the other by the lower chamber's speaker, Boris Gryzlov, had little to do with it.
A few months ago, Mayor Georgy Limansky, who lost the election, did not have any connection to United Russia. He joined the party just a month and a half ago in order to use its administrative resources during the balloting.
"Samara's regional governor, [Konstantin] Titov, went to see [Sergei] Sobyanin, head of the Kremlin administration, to persuade the Kremlin to support Limansky," said Oleg Sysuyev, former deputy prime minister and Samara mayor. "Before that, the party's local branch supported the candidacy of [Viktor] Sazonov, speaker of the regional legislature. But after the order from Moscow came, Limansky joined the party and United Russia switched over to him."
Quite similarly, Viktor Tarkhov's political affair with the Party of Life was driven by circumstances. However, putting on a party badge does not mean strengthening the party system.
"We saw a struggle between personalities in Samara, who merely simulated an inter-party struggle," said Yevgeny Gontmakher, academic supervisor of the Center for Social Research and Innovation, and an expert on Russia's behind-the-scenes politics.
Political expert Stanislav Belkovsky agreed: "Both United Russia and the Party of Life are in fact associations of bureaucrats. They both can be dissolved in a day should [President Vladimir] Putin wish it. So the political process is not headed toward a real multi-party system."
Yet even such a pretense is an achievement in Russia's current political climate. At least, ordinary voters were given an opportunity to participate directly in the balloting. It is very likely that people living in regional centers will soon no longer be able to do so.
"Many in the Kremlin, especially Sobyanin, dream of abolishing popular mayoral elections," Sysuyev said. "Of course, this move contradicts the Constitution and the European Charter of Local Self-Government, which Russia signed. But that will hardly deter our authorities."
