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. Last Updated: 07/27/2016

Tyumen Considers Buyout




Russia's seventh-largest oil producer, the Tyumen Oil Co., or TNK, may offer to buy out its Canadian partner in joint venture Tura Petroleum if the two sides cannot resolve their yearlong dispute, TNK officials said Thursday.


The suggestion has already been put to Black Sea Energy, the Canadian investor that in 1996 teamed up with TNK subsidiary Tyumenneftegaz, to exploit two Siberian oil fields.


"We may end up buying the other side's stake, or it may remain a 50/50 partnership with some changes in the charter," Tyumen Vice President Yury Shirmankin said at a news conference Thursday. "We hope to work this problem out by the end of February."


Black Sea has not responded to the proposal, Shirmankin said.


Black Sea is accusing TNK of using its clout with the local courts and the government to drive it out of a profitable venture after the Western company invested $44 million in the project.


TNK, however, says its efforts to reach a peaceful solution have been defeated by Black Sea which instead seems intent to damage Tyumen Oil's standing with foreign creditors and investors. The company is hoping to land a $500 million loan from the U.S. Export-Import Bank for its Samotlor field.


Shirmankin said TNK's new management discovered in September 1997 that the previous state-appointed managers had grossly underestimated the value of Tyumenneftegaz's contribution to Tura. "Our stand is simple: Let's hire an independent company to evaluate the contributions made by both sides," TNK President Simon Kukes said in an interview after the news conference.


Black Sea has been reluctant to accept this proposal, Kukes said, adding that the Canadians had instead chosen to lobby the prime minister, embassies and the Canadian government.


Tura officials deny opposing the independent audit.


Kukes believes TNK is a victim of stereotypes that are often applied to the Russian side in any joint venture.


"We are a Russian company, so they think they can twist our arms," Kukes said. "Right now Russia is in a position where our arms can be twisted - everybody knows we are dependent on foreign aid."


Black Sea officials including company founder Robert Friedland have failed to keep meeting appointments with TNK executives, Kukes added.


Gerry Burrows, president of Black Sea Energy, said TNK mentioned the possibility of a buyout a few months ago, but it had not named a price.


"What they have said about us not collaborating is absolutely untrue," Burrows said by telephone from Calgary, Alberta.


Under the original agreement, Tyumenneftegaz agreed to contribute its infrastructure and its exploration and production licenses to the field while the Canadian side promised to invest $52 million over three years.


TNK denies the Canadians have invested $44 million into the field because a large part of that money consisted of short-term credits which have been repaid with oil. Tyumen executives also say the transfer of Tyumenneftegaz's license to Tura was illegal, and a court decision last year upheld that view.


Tura has appealed the court decision.


Seeking help in its fight with TNK, Black Sea has also turned to another influential Russian company - Moscow-based Central Fuel Co. to which it has offered a 25 percent stake in Tura.


But a CFC spokesman said Thursday that his company is waiting to see the outcome of the joint-venture dispute. "We signed a framework agreement with them but nothing is finalized," the spokesman said. "We think the courts should decide this problem."