In a recent interview, Deripaska classified the situation he’s facing in securing the rights to go ahead and take control of Russneft — Mikhail Gutseriev’s former oil company — as “big company, big problems.” The Federal Anti-Monopoly Service, in a case muddled by tax problems and inter-governmental clashes, is expected to rule on his application to purchase most of Russneft’s assets by November 30th. As was reported earlier, Basic Element is joined by Swiss commodities trader Glencore in seeking Russneft’s assets. It now appears that the two firms are seeking to split the oil company 75%-25% respectively.
Deripaska also laid out his plans for Russneft, specifically how he hopes to concentrate on “the development of oil refining and petrochemical plants,” since the current oil situation in Russia is much more suited to profits from sales of refined products, rather than from crude (as explained by a recent Wall St. Journal article). This environment, combined with the fact that many of Russneft’s oil fields are apparently in decline, makes investing in refining capabilities the logical choice. Estimates for the cost of upgrading Russneft’s refineries stand at around $1 billion, however.
Oleg Deripaska’s attempt to buy Russneft is just one example of how the Russian billionaire is spreading his interests. His airplane unit is linked with Bombardier over a potential deal; his previous expansion into Canada’s auto-parts maker Magna has led to (denied) rumors that he’s interested in Land Rover, Jaguar, or other American auto players; he recently bought a quarter stake in the Austrian construction firm Strabag, with plans to cooperate on Russian infrastructure projects; and he is looking to partner with a Canadian mining company to enter into the gold industry, echoing the planned diversification outside of the aluminum industry for his mining behemoth RusAl. Despite these moves, Deripaska still pledges to stay focused on Russia.