MOSCOW, November 8 (RIA Novosti) Gazprom buys up RWE shares/Moscow to revoke Rospan International license/Rosoboronexport takes over major titanium producer/LUKoil buys new asset in Turkey/Gates warns Russian programmers against competition with India
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Gazeta.ru
Gazprom buys up RWE shares
Russian energy giant Gazprom has started buying up shares in the German energy company RWE AG and its subsidiaries. The German authorities are unhappy, but experts said the Russian monopoly has a fair chance of getting what it wants.
Earlier this week, the potential transaction was reported by two German publications. Their sources in investment banks reported that the acquisition of RWE shares was visible proof of the Russian company's intentions. Several structures were used to buy the shares, so that none of them would consolidate more than 5%.
Gazprom denied any interest in RWE's shares. "We are developing ties with Wingas [a joint venture of Gazprom and energy corporation BASF], which holds 15% in the German gas market, which is quite enough for us," a Gazprom spokesman said. "It seems premature to ponder the acquisition of other companies."
But some of the RWE beneficiaries confirmed Gazprom's interest. Dusseldorf authorities announced their readiness to sell their RWE stake (1%) to the Russian company. Lord Mayor Joachim Erwin said Dusseldorf evaluated its stake at approximately $510 million, but has not yet sent a sale offer to Gazprom.
Collecting a considerable stake (10%) will be a difficult task, because RWE has a complicated ownership structure that helps block takeover attempts.
Although Russian-German relations are considered friendly, the German government has spoken up against Gazprom's entry into RWE.
But experts said the Russian monopoly has a fair chance of attaining its goal.
"Gazprom and the German government will find a compromise solution. Gazprom will not provoke a conflict so as not to lose its export revenues, whereas the German government may request a considerable bonus for the asset," said Nikolai Saperov, senior oil and gas analyst with the Sovlink brokerage.
"Russian-German relations are quite friendly. Germany was the only Western European country to receive access to a major Gazprom mining asset, the South Russkoye field," said Denis Borisov, an analyst with the Solid brokerage. "If Gazprom acquires the [RWE] shares, the [German] authorities will not hinder a relevant agreement."
Kommersant
Moscow to revoke Rospan International license
The Russian Prosecutor General's Office has demanded that authorities strip Rospan International, a subsidiary of Russian-British oil major TNK-BP, of its license to exploit the East Urengoi gas field in the Yamal-Nenets Autonomous Area, in Northern Siberia, because of its alleged systematic violations of environmental and licensing regulations.
Experts said authorities are trying to force TNK-BP's co-owners, primarily Viktor Vekselberg, to cede control over the Kovykta deposit, which contains twice as much gas [2.1 trillion cubic meters] as East Urengoi, to energy giant Gazprom.
On September 25, the Prosecutor General's Office threatened to revoke the license of the TNK-BP-led consortium, Rusia Petroleum, which is responsible for developing the Kovykta field, because it allegedly violated development procedures.
Russian business tycoons Viktor Vekselberg, Mikhail Fridman, German Khan and Leonard Blavatnik, who own a 50% stake in TNK-BP, do not want to cede Kovykta to Gazprom free-of-charge, and are demanding a market price instead, experts said.
The concerned parties said nothing about the price until now, but by some estimates the implication is a sum between $500 million and $1.5 billion.
As Vekselberg said earlier, a holding company was proposed in which TNK-BP would control production and possibly chemical projects, whereas Gazprom would be in charge of transportation and marketing. However, no deal has been closed yet.
Rospan International is one of the few independent gas producers in Russia. "I would not be surprised if this is a way of exerting pressure on TNK-BP," said Alpha-Bank analyst Konstantin Batunin. Troika Dialog analyst Valery Nesterov said Rospan International is being persuaded to forge an alliance with Gazprom.
Gazprom denied it was involved in the Prosecutor General's Office claims.
Investment analysts said Rospan International is unlikely to have its license revoked. According to Nesterov, not a single major deposit development license has been revoked to date. He said the new owner will profit from an additional 16-18 billion cubic meters of gas, but will have to pay $400 million in compensation for TNK-BP, and that it is unlikely to avoid international lawsuits.
Nezavisimaya Gazeta
Rosoboronexport takes over major titanium producer
Russian authorities are eager to regain control of the most significant and above all strategic branches of the economy. Sergei Chemezov, head of the state-owned arms exporting company Rosoboronexport, announced Tuesday the conclusion of a contract to buy a 66% stake in VSMPO-Avisma, a major global titanium producer with 30% of the world's titanium market.
The state, he said, needs "no more." Experts describe the announcement as "technical," but it is not very good news for the enterprise and its private investors.
Commenting on rumors about Rosoboronexport's interest earlier this year, Avisma co-owner and director general Vladislav Tetyukhin said the state could have some stake in the company, but not a dominant one.
In March, he said that "rumors of the possible nationalization of the company caused a panic on the market, and this threatens to create alternative suppliers and to lose us our positions in the midterm."
Tetyukhin now has only 3.88% of the stock left. He had to remark Tuesday that the company needs about $1 billion for development and could not get by without state support. "The state must understand and help," the director general said, explaining the motives for selling the corporation.
In the view of industry experts, the acquisition benefits above all Rosoboronexport, since most of Avisma's earnings - about $750 million a year - is generated by titanium exports abroad, above all to Boeing and Airbus.
As for the enterprise itself, state management is unlikely to benefit it, considering the sad record of the AvtoVAZ car manufacturer, which is floundering with its development strategy.
"Investor risks will now grow," said Dmitry Smolin, an analyst with the Uralsib financial company. "VSMPO-Avisma is a steady-going concern, but there are risks of further consolidation with other enterprises whose performance is not so bright. And again, with the change of management, the company's future policy loses clarity, which is certain to affect investor sentiment considering that its shares are already underperforming on the market."
Gudok
LUKoil buys new asset in Turkey
Russia's largest oil company, LUKoil, has bought a petrochemical storage terminal, Aliaga, with a capacity of about 10,000 metric tons from Turkey's Turcas Petrol A.S.
Analysts believe the purchase should pave the way for Russia to build or buy a Turkish oil refinery.
LUKoil recently opened two gas filling stations in Turkey, and is negotiating the purchase of another hundred stations with Turkey's M-Oil. If LUKoil buys the oil storage facility and a network of gas stations, it will control up to 15% of the Turkish market.
Last summer, LUKoil CEO Vagit Alekperov said the construction of an oil refinery with a capacity of up to 10 million metric tons on the Black Sea coast would be lucrative, since the Bosphorus' carrying capacity has almost been exhausted, while foreign companies buy oil in Novorossiisk, refine it in Italy or Greece, and then deliver gasoline to the Turkish market at a loss.
The Aliaga terminal is linked to the Izmir oil refinery, which is also owned by Turcas Petrol A.S., but could work independently.
Dmitry Dolgov, a LUKoil official, refused to comment on the company's plans on the Turkish market. He said that no information was available, and warned against paying too much attention to the latest purchase.
He added that unlike the Turkish party, LUKoil has not announced the completion of the deal.
Gennady Krasovsky, head of the investor department with LUKoil, also refused to comment on his company's policy on the Turkish market. He would only say that LUKoil is eyeing profitable assets, including Turkish ones.
Analyst Denis Borisov from the Solid brokerage believes that LUKoil finds Turkey lucrative because its market is growing faster than the European one, and because gasoline consumption is always on the rise.
"It is quite clear why LUKoil wants to build an oil refinery in Turkey, but the ultimate decision will depend exclusively on the Turkish government," Boris said.
"Judging from Tatneft, which won the tender to buy 66% in the Tupras oil refining monopoly in 2004, only to see the result cancelled later on, the Turkish government is quite unpredictable. We can only guess here," he said.
Vedomosti
Gates warns Russian programmers against competition with India
Bill Gates, head of Microsoft and the world's richest man, was in Russia yesterday for an undisclosed reason. However, local observers said he came to study the possibilities of the local software market.
The billionaire refused to talk to journalists, and Pyotr Suzdalev, the press secretary of Microsoft's Moscow office, said Gates came to Russia to get first-hand information on research, education and economic innovations.
A Kremlin source said Gates wanted to meet with the country's leaders. "It was therefore decided that First Deputy Prime Minister Dmitry Medvedev, who oversees the priority national project in education, which interests the businessman, would talk to him."
A source close to Education Minister Andrei Fursenko said young Russian scientists showed Gates and the minister unique software programs, mostly designed for education.
Yury Ammosov, department head at the Ministry of Economic Development and Trade, who attended Gates' meeting with the scientists, said Gates spoke in favor of developing a good educational system, and said that innovation centers could be set up only in strong universities.
Ammosov said Gates warned Russian programmers against rivalry with Indian colleagues, whose work costs much less.
Deputy Minister of Economic Development and Trade Andrei Sharonov said Gates was interested in the development of communications technologies and the protection of intellectual property in Russia.
Gates views Russia, as well as China and India, as a very large market and wants to increase Microsoft sales there. Gates said he was satisfied with the progress made in copyright protection in Russia.
Gates was interested in Russian innovation projects and appropriations for them, as well as venture funds, said Ruben Vardanyan, board chairman of the Troika Dialog, Russia's oldest and largest private investment company.
Russia is a large market where Microsoft wants to get a firm foothold, and Gates had come here to evaluate its potential, Vardanyan said.
