Vertical of Mikhail Gutseriev

The company also said that it had agreed on purchase of 75% stake of the Krasnodar Refinery of 3 million ton annual capacity. In spite of the fact that the acquired enterprises cannot be ranked among the best Russia’s refineries, nevertheless it was the refining capacities that Mr. Gutseriev’s company lacked.
As far back as September TNK-BP announced its intention to sell out some of its assets, whose profitability rate was lower than the average throughout the company. As a result put out to tender were Saratovneftegaz with 1.6 million ton annual oil production and 22 million tons of proved and prospective oil, Orsk Refinery, Orenburgnefteprodukt with 101 gas-filling stations and 37 tank farms, and Neftemaslozavod of 100 thousand ton capacity. Yesterday it was announced that RussNeft was the buyer. According to Interfax, the company has paid a total of $1 billion. Today RussNeft is assuming operational control over these companies, directors will be replaced and board members will step down.
“TNK-BP is pleased that we have been able to make this sensible adjustment to our inherited portfolio of assets,” said head of TNK-BP Robert Dudley. In his turn Gutseriev said: “For our company it means new opportunities for dynamic growth of oil production, developing new logistics patterns for trading our oil products and accessing promising areas of the country, i.e. Saratov and Orenburg regions. Moreover, in the context of the deal we have acquired oil refining assets, which fact allows RussNeft to complete the circuit of the vertical integration of the holding”.
RussNeft has also informed that it had come to an agreement in principle on purchasing ‘Krasnodar Oil Refinery – Krasnodarekoneft’ ZAO. The company is to assume operational control over the refinery beginning from 2006. The refinery produces petrochemicals, gas oil, bitumen, and is the only producer in this country of higher density fuel for jet engines of T-1 pp type.
RussNeft oil output comes to 15 million tons per year. So far the company has had in its structure only one refining enterprise Slavneftekhin, but it is found in Byelorussia. The company also has 90 gas-filling stations, of which 59 are in Moscow. RussNeft has repeatedly announced plans to buy or build a refinery, in the Bryansk region as well. According to RussNeft Vice-President on Economics and Finances Olga Prozorovskaya, before doing the initial public offering the holding must complete its vertical integration. No final decision on IPO has been made though.   

Denis Rebrov