RussNeft, the Fastest Growing Oil Company in Russia, to Expand its Export.
NK RussNeft OAO, the fastest growing oil company in Russia, is going to double its production volumes and bring them to a level of 400 000 barrels per day. The Company also plans to export the most part of its crude thus balancing the slow-down of crude oil production that occurred after the government cracked down Yukos.
RussNeft, the 10th biggest oil producer of this country, is going to increase its export next month thanks to the new terminal put up with the help of a Swiss trader called Glencore International AG.
Established in Moscow RussNeft did more than tripled its production last year achieving a level of 200 000 barrels per day by purchasing small companies and investing in oil production.
"We have improved export possibilities of Russia by 5 million tons per year", said Mikhail Gutseriev, who is the 40th among the richest men in this country. He made this statement at the ceremony held in view of the opening a new terminal in the town of Zhecha. The terminal has been put up by RussNeft near the border with Byelorussia at a price of $90 million.
Today Russia, the second largest oil producer in the world, requires more investments as the rate of production growth has reached the level of 1999, when the oil price fell lower than $10 per barrel, which is less than one fifth of the current price. Growth rates keep dropping in such companies as Lukoil that overtook Yukos, the biggest producer of oil before the arrest of Mikhail Khodorkovsky in 2003, the owner of Yukos.
RussNeft is planning to export all of its crude oil, whose volume may come to 4 percent in the total oil production of this country by the end of this year, apart from the shipments to Yukos’ refinery in Syzran, located in the central part of Russia. Nowadays RussNeft is daily delivering to Syzran Refinery about 30 000 barrels of crude. But for all that the investment plans of the Company aimed at developing production growth, including construction of the terminal, amount to $240 million.
Since 1999 extraction growth rate in Russia has increased by approximately 50 percent. However the state monopoly controlling Transneft pipelines forces producers to use more railway and river transportation.
Business Development
Mikhail Gutseriev developed the three-billion-dollar RussNeft within a short period of time buying companies similar to Tomsk Neft ZAO and Aganneftegasgeologiya ZAO which produced 880 000 barrels in May. RussNeft, which bought more than 17 companies last year, won’t give any comments about the sums of those acquisitions. The millionaire established RussNeft in September 2002 with his partners whom he won't name. The government dismissed Gutseriev from Slavneft management before selling the Company for $2 billion to TNK OAO and Sibneft OAO. Currently British Petroleum and Sibneft are running Slavneft. RussNeft’s terminal, the biggest investment project in the Bryansk region, will ship by railway about 100 000 barrels per day to Eastern Europe, Baltic States and the refineries of Byelorussia, including Mozyr Refinery possessed by Slavneft. The first export deliveries from RussNeft’s terminal are planned for next week. Gutseriev said that Glencore took part in the financing of the project, its contribution being 50-60 million US Dollars. The rest was paid by Russneft. But for all that the production capacity of the terminal is to be expanded to 7 million tons per year, and in future RussNeft intends to build a refinery not far from the terminal.
Moreover it is in the plans of RussNeft to construct a seven-million-ton-capacity terminal at the Baltic Sea in Kalinigrad, Russia’s enclave. It is to be done by the end of next year.