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. Last Updated: 07/27/2016

Surgutneft Increases Stake in Exporter




Surgutneftegaz, Russia's second biggest oil company, is quietly acquiring shares in its main export operator, Nafta-Moskva, in a move that would give the company better access to the global market, company officials and oil experts said Tuesday.


It is unclear whether Surgutneftegaz is increasing its 14.99 percent stake in exchange for outstanding debt or is buying them up on the secondary market, but a source at the oil giant said Tuesday that the stock is most likely being transferred from Uneximbank as partial payment for a $500 million to $800 million debt.


"I don't rule out that we are talking about a transfer of the Uneximbank-controlled stock and not about a purchase," said the source, who spoke on condition of anonymity.


Prime-Tass reported last month that Surgutneftegaz was buying up shares in the oil trading firm on the market. Citing sources at Nafta-Moskva, the news agency said Surgutneftegaz has already obtained about 25 percent of shares in Nafta-Moskva and is planning to acquire more stock. Under Russian law, a company needs 25 percent plus one share to hold a blocking stake.


Surgutneftegaz on Tuesday refused to officially confirm or deny that it was acquiring shares. Nafta-Moskva officials were unavailable for comment.


Company source and oil experts agreed that such a deal would be advantageous for Surgutneftegaz, which has been following a strategy of boosting oil exports. Selling oil abroad is more profitable for Russian companies than domestic sales because such deals bring in much-needed hard currency revenue.


"If Surgutneftegaz boosts its stake in Nafta-Moskva, it will of course be good for the company," the Surgutneftegaz source said. "A company with a blocking stake will be allowed to dictate its interests, including increasing the number of countries where it may export its crude, better schedules and a lot of other benefits."


"I can understand why [Surgutneftegaz might be interested]," Alfa Bank oil analyst Konstantin Reznikov said. "Nafta-Moskva is a major export operator and Surgutneftegaz could want to increase its influence over the company. I assume that they would like to boost their stock until they get a blocking or even a controlling stock."


It is unclear who owns the rest of Nafta-Moskva's stock. In 1995, Nafta-Moskva and Unibest bank, backed by Uneximbank guarantees, won a 15 percent stake in a shares-for-loans auction. Russian company Svift Ltd., which is thought to be affiliated with Uneximbank, also bought a 14 percent stake in Nafta-Moskva for 66.1 billion rubles ($11.8 million) in January 1997.


Of the remaining shares, 15 percent still belongs to the state, a small amount is believed to be held by the company's employees, and an unknown number is supposedly held by bankrupt Inkombank.


Surgutneftegaz is expected to export up to 14 million tons out of the 34 million tons it extracted in 1998, Reznikov said. In 1997, the oil giant exported only 11.66 million tons out of the 33.3 tons extracted.


Those predictions look realistic. Surgutneftegaz spokeswoman Raisa Khodchenko said the company exported 11.88 million tons in the first 10 months of 1998. Most of thisoil was shipped through Nafta-Moskva, while the rest was exported via Kinex in St. Petersburg, she added.