Times of RussNeft

RussNeft started to form its own network of petrol stations in the area of Moscow in 2005. The process of becoming a leader in the refueling business of the metropolis and Podmoskoviye proceeded in two stages. On the brink of March-April the company informed of finalizing the deal on acquisition of Moscow’s biggest independent gas-filling network called Grand. Experts estimated the purchase as a good buy because Grand covered 8.5% of Moscow’s market, and its network comprised 59 gas-filling stations in the capital and 5 in the Podmoskoviye. At that the stations conformed to modern requirements and were favorably located. In the beginning of October RussNeft announced the opening of the first re-branded petrol station of Grand and its plans to complete the design of more than 30 stations in the new RussNeft style by the end of 2005.
The second step on the way of strengthening its status at Moscow’s market has been the purchase of another gas-filling network operating under the name of Corus. This network comprises 31 petrol stations in the area of Moscow (and five more stations in the Smolensk oblast). The annual sales volume of Corus network approximates 150 thousand tons. The re-branding is planned to be done in the course of the year. The acquired assets also include oil storage depots in Solnechnogorsk and Smolensk, and 24 petrol tankers.
So currently RussNeft has at its disposal 95 gas-filling stations in Moscow and its province, covering 11.3% of the metropolitan market, which automatically makes the company a leader at the fuel retail market because the number of its gas-filling stations and complexes is much more than any other company has. For comparison MTK being part of Moscow Oil and Gas Company has moved to the second position as it has 75 active gas-filling stations in Moscow.
While developing the refueling business in Moscow and its province RussNeft is going to pay special attention to the quality control of the oil products and improve service conveniences at the company’s gas-filling complexes.
RussNeft’s gas-filling complexes must be brought in conformity with all the modern requirements. They will provide a variety of services to its clients ranging from offering ecologically pure gasoline to rendering technical assistance.
Analysts of the fuel market refer to the purchase of Corus by RussNeft as ‘a strong decision’. It was no unexpected move though, as RussNeft never kept back its intention to take a strong stand at the most promising market of this country. Such move coherently arises from the dynamics of the development of the company, which is one of the youngest and most quickly developing. Established in 2002 RussNeft is currently one of the ten first-rate oil companies of this country. During 2002-2003 the company conducted large-scale consolidation of its business and acquired quite a number of promising production assets. In 2004 while proceeding with buying assets, RussNeft integrated all its subsidiaries into a single production network. During 2004 the company increased its oil output in five times reaching 10 million tons. According to its President and Founder Mikhail Gutseriev, the turnover of the company amounts to $3 billion. In the nearest future RussNeft is going to increase its oil output to 20-25 million tons a year, strengthen its refining and sale capacities by including an own refinery into the structure of the holding, optimize operation of the gas-filling network spreading over 13 regions of RF and CIS. Among the long-term goals of the company the first one on the list is the intention to become a leading Russian producer of oil, gas and oil products.
The expansion of the retail sales network both in the capital and other regions of Russia fits in logically into RussNeft’s strategy to become a vertically integrated company.
Considering the acquisition of Grand and Corus in the area of Moscow it is becoming especially topical for RussNeft to build its own refinery. As MoToR has come to know, RussNeft has forwarded an application to the regional Duma of the Bryansk region asking for permission to begin construction of a refinery in the area. According to the project presented by the company, the construction budget of the refinery amounts to 50.2 billion rubles. The refinery is meant to process 6 million tons of crude oil. One shouldn’t rule out that in future RussNeft will try to acquire shares of Moscow Refinery which will definitely make the operation of the company more efficient at the retail market of Moscow and its province.
In the meantime the petrol stations of RussNeft in the area of Moscow will be supplied with the products produced at the refinery in Syzran which belongs to Yukos. According to RussNeft Public Relations Vice-President Edward Sarkisov, the company has an agreement with the refinery for processing 3 million tons of crude oil in 2005. With all that going on, RussNeft is planning to acquire a certain part of the oil products at the market.