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. Last Updated: 07/27/2016

Tatneft Buys Coveted Stake In City Petroleum Retailer




The nation's No. 7 oil company, Sibneft, has sold a 14.68 percent stake in Moscow petroleum product retailer Mosnefteprodukt to No. 4 oil company Tatneft.


News of the deal has shaken Moscow's fuel suppliers because Roman Abramovich-controlled Sibneft's ownership was passive whereas Tatneft has specific designs on the capital's fuel market.


Now Mosnefteprodukt's third- largest shareholder, Tatneft spent all of 1999 aggressively attempting to build up its presence on the Moscow petroleum products market.


Tatneft had earlier attempted to acquire stock in the Central Fuel Co., or CFC, which owns 38 percent controlling stakes in Mosnefteprodukt and the Moscow Oil Refinery.


In a joint effort with Mosnefteprodukt's second-largest shareholder, LUKoil, the two companies tried to acquire a 13 percent stake in CFC in exchange for a portion of their oil fields.


CFC chief Yury Shafranik and Moscow Deputy Mayor Boris Nikolsky backed the Tatneft-LUKoil bid. However, Mayor Yury Luzhkov had other ideas and handed the CFC holdings over to the Moscow Oil Company, or MOC.


Shalva Chigirinsk, director of the ST Group, which recently became one of MOC's new co-owners, intends to turn over his company's stakes in the Yugraneft and Evikhon refineries to MOC.


After losing the battle for the CFC shares, Tatneft turned its sights on smaller prey and at the end of April purchased Sibneft's stake in Mosnefteprodukt. Because 25 percent of Mosnefteprodukt's stocks are preferred, that acquisition qualifies Tatneft's and LUKoil's combined holdings as a blocking stake in the company - any stake size between 19 percent and 38 percent - and could bear influence on future shareholder decisions.


Sibneft has long been planning to sell off its Mosnefteprodukt holdings. In an interview last year, Sibneft president Yevgeny Shvidler said the company did not consider itself a serious player on the Moscow market.


MOC bosses have expressed displeasure with the deal. "I was kept absolutely uninformed. It's obvious that these people are operating in a completely uncivilized manner," said MOC president Ernest Bakirov on April 27.