Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Exodus at Rosneft Goes On as 4 Quit

A slew of Rosneft oil company's top managers resigned Thursday in what analysts said was another sign that several of Russia's powerful financial-industrial groups are locked in battle for a piece of the company.


Four executives submitted their resignations Thursday, including Vladimir Mikishin, the official overseeing Rosneft's lucrative investment projects in Sakhalin and Timan-Pechora with Western oil partners.


Rosneft's chief accountant Raisa Bulkina, her deputy Margarita Molchanova and the head of the information department Alexei Visly also left, Reuters reported.


No reason was given for the resignations. But the departures were just the latest in a string of management to leave Rosneft.


Rair Simonyan, the oil company's first vice president, was dismissed by Rosneft President Yury Bespalov on July 10.


Some analysts believe the resignations are a result of rifts within the company caused by a battle between financial-industrial groups on the eve of Rosneft's expected privatization.


The company was rumored to be slated for privatization this year, but First Deputy Prime Minister Boris Nemtsov made it official this week, declaring that a July 28 special board meeting would decide exactly how and when the Rosneft privatization would take place.


In any case, the auction would be delayed by an ongoing legal battle over Rosneft subsidiary Purneftegaz. But now officials say the auction could happen before the end of this year.


"The government hasn't been an effective owner, and therefore the company should be privatized like other companies in the oil sector," Sergei Kirienko, the deputy fuel and energy minister, was quoted by Prime-Tass as saying.


Rosneft holds a mixed bag of assets, including federal government stakes in the long-term Caspian and Siberian oil-drilling and transport projects.


CentreInvest Securities analyst Ivan Mazalov said Rosneft has 15 downstream operators with 1,223 gas stations, and its prize holding Purneftegaz accounts for 65 percent of production.


The same powers battling for Purneftegaz in court are likely behind the management changes at Rosneft, analysts said Friday. One is Uneximbank, led by former first deputy prime minister Vladimir Potanin, and the other group, headed by Boris Berezovsky, is a consortium made up of Sibneft oil company, the LogoVAZ auto firm and other interests.


Analysts said Rosneft's Bespalov has apparently allied himself and the company with Berezovsky's Sibneft and pushed out management loyal to Rosneft chairman Alexander Putilov in favor of others loyal to Sibneft.


"The people Bespalov replaces them with are ex-Sibneft, and Berezovsky supposedly has Prime Minister Viktor Chernomyrdin's blessing if he wants to go after Rosneft," said one London-based oil and gas analyst.


Because the government is in such dire need of privatization revenue, it may be able to pit Berezovsky and Uneximbank against each other to push the company's price tag up.


In past auctions, prized government assets have been sold off in insider deals to companies close to the government for far below the market value.


"People like Nemtsov want to receive real money for the sale of this asset," said Mazalov. "Whereas a closed auction introduces a fixed price, and the winner would get a good chunk for a bargain.