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. Last Updated: 07/27/2016

INTERVIEW: Rosneft Spat Puts Key Player in Clinic




Fighting a three-year tug-of-war over a major oil producer with annual sales of half a billion dollars would be enough to give anyone a heart attack.


It certainly did no good for the health of Alexei Matevosov.


On Sunday, four days after a provincial court in the northwestern Siberian oil town of Gubkinsky fired Matevosov from his post as Purneftegaz general director, he was hospitalized in Moscow with heart problems.


"I overdid it," Matevosov said Wednesday, looking relaxed while leaning back into one of the sitting chairs in his comfortable hospital bedroom.


Matevosov overdid it by spending the previous 10 weeks fighting to convince creditors to accept a debt-restructuring plan that prevents the bankruptcy of Purneftegaz.


On Dec. 15, Matevosov thought that he had successfully completed that deal, capping a three-year battle royal for control of an oil extraction company with annual sales of more than $500 million.


Sidanko began that fight back in 1995 when it tried to use the courts to wrest Purneftegaz from state-owned Rosneft holding company.


Sidanko failed, but trouble flared again almost immediately as a group of individuals affiliated with Sibneft infiltrated Purneftegaz. Sibneft's role was challenged when a controlling stake was sold in September to four previously unknown Moscow-based firms for just $10 million - a ridiculous price for a company with annual sales of hundreds of millions of dollars.


After that sale had been overturned by the Moscow courts, it looked like Purneftegaz was back where it belonged, in the hands of Rosneft.


That impression was confirmed when Matevosov succeeded in reaching an agreement with Purneftegaz creditors before a Dec. 1 deadline. Without the agreement - the fruit of intense, drawn-out negotiations by Matevosov - the company would have been technically insolvent.


The long hours paid off, and 95 percent of the creditors supported Matevosov's debt-repayment proposal, a decision upheld in a regional court two weeks after the Dec. 1 deadline.


When a court in the town of Gubkinsky, Purneftegaz's regional headquarters, ruled to uphold that agreement, it seemed as though Matevosov and his allies had won.


They hadn't. Within 24 hours of the apparent victory, the same court deprived Matevosov of his duties, appointing Vladimir Ivanchenkov temporary director until a permanent candidate could be chosen by the company's board. Ivanchenkov, a bureaucrat from the municipal administration, is also a crony of Yamalo-Nenetsky district Governor Yury Neyelov.


Matevosov, who was barred from appearing before the judge who ordered his removal, has no doubts as to why he was fired.


The forces behind September's mystery $10 million sale, frustrated by the string of court losses in Moscow, have taken their battle to Purneftegaz's home turf. And Neyelov is in on it.


"[The agreement with creditors] did not satisfy the governor" and his people, Matevosov said. "They want to get their hands on Purneftegaz."


"[Both the four firms and Neyelov] are all links in one chain," Matevosov explained. "Those who wanted to seize the 38 percent of Purneftegaz were basically in cahoots with the governor and the governor's deputy."


Reports in the Russian media indicated that the company behind the four firms that attempted to buy Purneftegaz, International Economic Cooperation, a diversified business holding whose core activity is trading crude oil, approached Neyelov with its strategy to acquire and invest in the Gubkinsky-based oil company.


Matevosov confirmed this, saying that several trips were made by these "investors" to Salekhard, the capital of Yamalo-Nenetsky district, which is part of the Tyumen region in western Siberia, to visit Neyelov and discuss investment plans for Purneftegaz.


However, when the sale scandal reached crisis proportions, Neyelov purportedly jumped the fence to join the government's side in the standoff, given the tremendous pressure mounted by President Boris Yeltsin and Prime Minister Yevgeny Primakov to have the controlling stake returned to Rosneft.


Sergei Bogdanchikov, president of Rosneft, said in an interview with the daily Kommersant in mid-October that governor Neyelov told him it is "imperative" that Purneftegaz be returned to Rosneft.


He even told Bogdanchikov of his intention to write a letter to the president, the government, the State Duma and the Federation Council expressing this need.


"Bogdanchikov is too trustworthy," Matevosov stated flatly. "I am trying to convince him of the nature [of Neyelov and others]," he said. Neyelov has long wanted his own person running the show at Purneftegaz, and specifically appointed Ivanchenkov external observer for this purpose, Matevosov added.


According to Matevosov, the governor wants to gain control of the lucrative oil company, which would become a tremendous asset for regional finances. Purneftegaz is a young operational unit with high flow rates and low-sulfur crude. This year's sales will reach about $550 million, though in previous years they were as high as $800 million.


The governor will accomplish this by first putting an associate in the director's seat, then by racking up debt on Purneftegaz's balance sheet through "friendly companies," Matevosov added.


Then, when the debt comes due, the company will be bankrupted, and the "friendly creditors" will take over the company.


"This is the task of the governor, the governor's deputy, and the head of the city of Gubkinsky," stated Matevosov. "They want to bankrupt the company."


Ironically, Matevosov has indirectly been accused of the same tactic. Since taking over at the company in February at the request of Rosneft, Purneftegaz was reportedly selling oil at below-market prices to Omsk Refinery, a subsidiary structure of Sibneft, which in turn is controlled by Boris Berezovsky. Such a practice drains a company's profit margins.


Yury Bespalov, former president of Rosneft who appointed Matevosov, is widely believed to be a member of Berezovsky's closest circle. After becoming company president in the spring of 1997, Bespalov invited many Sibneft employees into key positions at Rosneft, including the posts of head accountant and head engineer.


Matevosov actually replaced his younger brother Andrei when he took over at Purneftegaz. His brother moved on to head Noyabrskneftegaz, Sibneft's production unit located in the same region.


Alexei Matevosov, who has worked at Purneftegaz since 1989, said that Purneftegaz currently has $200 million in hard-currency debt and 350 million rubles ($17.5 million) in domestic debt. Most of the hard-currency debt - $180 million - is owed to the World Bank for Reconstruction and Development and the European Bank for Reconstruction and Development.


The remaining $20 million, in the form of two $10 million loans from ABN-Amro and Credit Lyonnais, are currently due but will be rolled back until 1999, Matevosov said.


For the time being, Matevosov's people at Purneftegaz are hunkering down in the trenches. Matevosov's deputy, Viktor Kiselyov, is serving as acting director, and so far has been able to prevent the governor's appointee Ivanchenkov from assuming operational and financial control over the company, Matevosov said.


Meanwhile, Rosneft and Purneftegaz's creditors continue to extend Matevosov their support, he said, and a series of court appeals are being prepared against the Dec. 16 court decision.