Russneft’s future in the air

After a Russian arbitration court today upheld the government’s claims of $145 million in back taxes owed by the 300,000 bpd oil firm Russneft, the company’s head, Mikhail Gutseriyev, is said to be in talks to sell to a Kremlin-friendly entity. Gutseriyev denies that he is planning to sell, however, suggesting his company is worth $8-9 billion, more than the $6.5 rumored to be offered by Oleg Deripaska’s investment firm Basic Element. Rosneft has also been suggested as a potential buyer, based on oil major’s recent acquisitions.

Gutseriyev, the former head of Slavneft, went on to create Russneft from a collection of small acquisitions around 5 years ago, made with the help of financing from the Swiss commodities firm Glencore. This winter, Russneft came under pressure from the Kremlin over back taxes owed by the company, culminating in a raid of its Moscow office in May followed by the tax charges.

Some say the accusations stem from Russneft’s association with the foreign firm Glencore. Others suggest that it has more to do with the manner in which Gutseriyev was able to so cheaply acquire the assets, particularly from Slavneft and the embattled Yukos. Indeed, it would seem that the Kremlin’s displeasure would derive more from the spirit of the deals, rather than their actual content, as Russneft remains a relatively small player in the Russian oil scene, accounting for about 3% of the country’s total production. However, Rosneft and Kremlin-controlled firms are inching their way towards 50% control of Russia’s oil sector, so any additions would add to that cause.

A press release by Russneft says that it “did not enter in any negotiations as to the sale of the holding’s shares and does not have any intention to. OAO NK “RussNeft” is not sold.”   It goes on to call the rumors of the impending sale as “a provocative act.”

One response to “Russneft’s future in the air

  1. Pingback: Kremlin, Inc » Russneft’s sale

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