Chubais Wants Rosneft to Butt Out

Unified Energy System CEO Anatoly Chubais lashed out at state-controlled Rosneft on Wednesday, accusing the country's largest oil company of "anti-government activities" and jeopardizing vital reforms to the country's electricity sector.

The comments by Chubais were related to a lawsuit filed in February by Rosneft subsidiary Neft-Aktiv over the formation of an electricity generating company, TGK-11, in the Omsk and Tomsk regions. The creation of the company was decided on last year as part of a larger reorganization of the country's electricity sector.

"This is the first time we have been unable to reach agreement with minority shareholders on the reforms," Chubais said testily on the sidelines of a conference for electricity market reform Wednesday morning. "A state-run company is preventing the realization of our investment program. This is unprecedented."

The lawsuit by Neft-Aktiv, a former minority shareholder in Tomskenergo, claims that the company did not receive an absentee ballot for an August shareholders' meeting that voted to merge the local electricity and heating producer into TGK-11.

TGK-11 rejected the complaint, saying Neft-Aktiv received all the proper documents in time.

A Novosibirsk court then ruled that the auction of TGK-11 could not go ahead until the lawsuit was resolved. The next hearing is scheduled for May 7.

In the meantime, Chubais said, the oil company is holding up much-needed reform in the sector.

"Rosneft is acting against the decisions of the government," Chubais said. "If Rosneft continues with this stance, the construction and modernization of TGK-11's stations could be jeopardized because it will not raise enough money in time from the sale."

The auction of the state's 21.3 percent stake in TGK-11 and an additional share emission of 26 percent had been scheduled for the end of March. UES had expected to raise at least $340 million on the additional offering alone.

"Rosneft's financial claims are ridiculous in monetary terms," Chubais said. "They concern about 1 percent of the TGK-11 investment program."

UES says delays in the TGK-11 program threaten to leave more than 300,000 people without heat and electricity in the Siberian city of Omsk if a new heating and power station is not built by 2012. The cost for the new station will be $735 million, and an estimated additional $259 million will be needed for modernization of another station in Omsk.

Rosneft spokesman Nikolai Manvelov was brief Wednesday in his reply to Chubais' comments.

"We think the UES decision to reorganize some of its parts contravened our rights as a shareholder," Manvelov said. "We were not notified of the date for the shareholders' voting on the decision to form TGK-11. As a result, our stake in the company was diminished."

Chubais said UES had received no answer from Rosneft to "strong" compromise offer, an issue on which Manvelov refused to comment.

Neft-Aktiv last year represented Rosneft in a number of bankruptcy auctions of Yukos assets, which it bought at a discount.

Rosneft ended up with an interest in Tomskenergo through its purchase of a 50 percent stake in former Yukos unit Tomskneft.

Rosneft has been active in fighting parts of the electricity sector's reorganization in court, filing a total of seven suits in the Moscow Arbitration Court related to companies in which it holds shares.

Neft-Aktiv has also contested the decision to offer a supplementary TGK-11 share issue, the merging of TGK-11 with TGK-11 Holding and the consolidation of four smaller companies in which it has a minority stake: Tomsk Distribution Company, Tomsk Trunk Network, Kubanenergo and the Kuban Trunk Network.

Such strong public criticism of Rosneft, which is chaired by the presidential administration's deputy chief of staff, Igor Sechin, from a senior figure is rare. The most recent time the company drew this kind of fire was last year from Chechen President Ramzan Kadyrov. Then the republic's prime minister, Kadyrov accused Rosneft of not paying enough in taxes to local coffers.

Rosneft responded at the time that it was acting in compliance with the law.

n Chubais said Wednesday that he had not changed his mind and would still retire after UES ceases to exist on July 1.

"I am counting days before I become a pensioner," he said, smiling broadly.

Staff Writer Anatoly Medetsky contributed to this report.