Gutseriev’s petrol stations

RussNeft completes the purchase of Geoprogress, as Mikhail Gutseriev, one of the RussNeft owners said to Rossiya 24. The deal price amounted up to 100$ mln. The company’s reserves make up around 20 mln tons, he said. Geoprogress is registered in Orenburg region. Kalish Services Limited is the  sole owner of the company. The company is not profitable: the net loss made up 953.7 mln rubles, the revenue made up 714.4 mln rubles and long-term and short-term obligations amounted to 3.13 mln rubles in 2014.
“This asset is situated next to our fields”, Mr. Gutseriev said. “We are already producing above 400,000 tons in Orenburg with Forteinvest. These are Preobrazhenskneft fields. Cummulatively we get a good economics with this synergy. This is above 45 mln tons of recoverable resources in the aggregate”. After Geoprogress purchase the production output in the region will make up 500,000 tons of oil. This oil goes to Orsky oil refinery which belongs to RussNeft affiliate company. The amount of the processed oil at the plant made up 5.9 mln tons in 2014, as a result of processing 696,300 tons of petrol were produced as well as 1.6 mln tons of diesel, 2 mln tons of fuel oil and 373,100 tons of jet fuel.
The plant will be upgraded in three stages, as Said Gutseriev (the son of Mikhail Gutseriev), Forteinvest General Director, told Interfax. The investment will be around 3$ bn. After the upgrade the production volume of light oil products will reach 85%, the refinery yield will amount to 96%.
Mikhail Gutseriev informs that RussNeft intends to develop the network of petrol stations in Russia and Belarus. RussNeft had its own network of petrol stations – around 300 units in Russia, but it sold them. According to Vitaly Krukov, Small Letters Director, retail fuel sales are profitable at the moment. Gutseriev plans to make a vertically-integrated company: “This model is more resistant to declining oil prices”.
“There will be several bids in Belarus in the nearest future [50 petrol stations will be sold in December]. The bids will be organized by the state, as far as I know. We will make offers, I think we will win.” – Gutseriev said on Tuesday. He is well-known in Belarus. RussNeft supplies oil to Mozyrsky and Novopolotsky oil-processing plant. Gutseriev’s Slavkaliy is constructing a potassium plant in Belarus costing 1.7$ bn, with 1.4$ being a loan from China Development Bank though Belarusbank at the rate of 4% per annum for 14 years.
Gutseriev established RussNeft in 2002. He reduced the share in the Company down to 54%. Glencore received the other share as a debt. The debt of the company is 2.3$ bn at the moment (the debt to VTB). RussNeft will convert additional 1$ bn by the end of the year, Gutseriev said. RussNeft and VTB representatives refused to give comments. Gutseriev intends to combine the oil assets and to hold an IPO in 2016-2017. While Mr. Gutseriev was in London for 3.5 years he established Neftisa producing 4.5 mln tons. According to his words EBITDA of all the group’s oil assets made up 1.2$ bn in 2015. “The currency rate difference and the tax maneuver allow us to operate approximately with minimal economic efficiency. We expect to receive the profit after 2018,” Gutseriev said.