True Grand.

RussNeft, an oil company of the second echelon, has bypassed the majors of the industry in the fight for the assets of Moscow’s fuel market. According to the information available at the Profile, the company is to finalize the purchase of the second largest retail network called association Grand before the end of 2005. But for all that the operational management of the company has been done by RussNeft beginning from April. As experts assume, the owners of Grand managed to arrange for the sale before independent fuel retailers could face serious problems already this month. For the three years of its existence RussNeft has beaten all the records in the domestic oil industry buying production assets. Counting shows that each quarter of the last three years the company bought one producer.
To tell the truth, RussNeft bought mostly small oil producers. Today the company structures more than 20 enterprises. One can say that the head and owner of RussNeft, Mikhail Gutseriev (the company belongs to him and his partners), has kept on pursuing the policy, successfully broken in as far back as he was President of Slavneft. Just to remind that in many respects thanks to the buying up of assets during his time at Slavneft the company was able to increase its oil output in two times during the last six years bringing it to 22 million tons in 2004.
As for the offspring of Gutseriev RussNeft, according to the record of the company, it intends to produce about 15 million tons of crude in 2005. In the nearest future RussNeft wants to continue acquiring assets and bring its oil output to 25 million tons of crude oil per year.
The plans to increase the oil output has made the company think about getting access to oil refining and oil products selling. To have fuel to deliver to the interior market RussNeft has arranged for processing its crude oil at Yukos’ refineries in the Samara region. How much crude will be refined this year is not known though. But Gutseriev’s company intends to feed all the petrol stations of Grand with its own oil products. As for the deliveries from Slavneft, a former Grand supplier, they shall be stopped.
Altogether Grand network has 59 petrol stations in Moscow, 6 in Podmoskoviye and 25 in the Krasnodar region (in the area of Sochi). With this number of petrol stations the company will cover 8.5 % of Moscow’s fuel market (see the table). Association Grand will be bought from a German fund belonging to General Director of Rosgosstrakh Danil Khachaturov and his partners. The deal is distinguished for being associated with the Slavneft past of Gutseriev. Khachaturov used to be in Gutseriev’s team when working at Slavneft as a vice president of the former state-run company. It was in that time that the present owner of Grand got control over this retail network.
As assessed by experts, Grand may cost about $100 million. However, according to the Profile information, the parties have not finalized the price so far. Therefore the deal is planned to be completed not immediately but before the end of the year. Mikhail Gutseriev, Danil Khachaturov and the new head of Grand, Abubakar Beckov, refused to give any comments.
The purchase of the second largest Moscow’s retail network, in the opinion of the Profile’s source in a big fuel company, is a clever move made by Gutseriev. At the metropolitan market, where belong most petrol stations of the retail network, profit     
With the help of RussNeft Grand may be able to avoid consequences of one more problem. In the beginning of this April the wholesale price of oil products at Moscow’s market was virtually equal to the retail one. According to the data of Moscow Fuel Association at that time, the wholesale price for Ai-92 was 11.99 rubles per liter, and retail price 14.48. As estimated by Serguiyenko, the profit of the companies went down to 1 ruble per liter. In order to keep the previous profit