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. Last Updated: 07/27/2016

Rosneft Soldiers On in Bid to Reclaim Seized Oil Unit

The management of the state-owned oil company Rosneft announced Thursday it had decided to continue the battle to regain ownership control over Purneftegaz, its production subsidiary that was seized by court order in June and sold off for outstanding debt in September.

Sergei Chizhov, acting president of Rosneft, said the management plans to invite a team of lawyers to search for legal ways in which the lost stake, the estimated market value of which is $80 million, may be returned to the holding entity.

The 38 percent stake in Purneftegaz was sold for $10 million in mid-September to four firms believed to be loosely affiliated with LUKoil, Russia's largest oil company. The court-ordered sale proceeded after Rosneft failed to pay back outstanding loans for 34.8 million rubles ($5.6 million at the predevaluation rate) from two banks, MAPO Bank and Mestbank.

However, the actual shares have still have not been transferred to the four buyers due to an investigation into the sale launched by the General Prosecutor, Chizhov said.

This hasn't prevented the new owners from moving in. Chizhov reported that Purneftegaz had called for an extraordinary meeting of the board of directors and was likely to elect a new chairman. He also said he had heard a rumor that external management might come in and take over the company's operations.

Asked why Rosneft had failed to hold on to the Purneftegaz stake, its most prized asset, Chizhov hinted that the company had been sabotaged from within.

"In my opinion, someone in the company facilitated the process" of the loss of Purneftegaz, said Chizhov. "Everything happens for a reason," he said sardonically at the end of the news conference.

Chizhov took over the president's position at Rosneft on Aug. 28. He has since asked to be replaced, complaining he could not combine the post with his duties as deputy fuel and energy minister.

"Most of the company's problems are due to the fact that there is no normal management," said Chizhov, adding that he was the fourth person to run Rosneft's operations in less than two years.