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. Last Updated: 07/27/2016

Vainshtok Will Leave Transneft After 8 Years

VedomostiSemyon Vainshtok
Transneft president Semyon Vainshtok said Tuesday that he would leave the pipeline monopoly to spearhead preparations for the 2014 Winter Olympics in Sochi.

No replacement was immediately named for Vainshtok, who has run Transneft for eight years.

"I can leave Transneft with an easy heart, because it's stable, well-structured and firmly stands on its feet," Vainshtok told President Vladimir Putin during a meeting at the president's Novo-Ogaryovo residence outside Moscow.

Vainshtok will reach the usual retirement age of 60 next month, and several times over the past year he has expressed a desire to retire after his birthday.

Interfax, citing a source close to the Transneft board, said leading candidates to replace Vainshtok included Zarubezhneft head Nikolai Tokarev and Gazprom deputy CEO Valery Golubev.

Tokarev described talk of his possible candidacy as "rumors that I will not comment on," Interfax reported.

Transneft shares have been rising since last week on rumors that Vainshtok was preparing to resign. Some market players have said that a change at the top of the firm could lead to a change in corporate governance, which has been characterized by years of low dividend payments to minority shareholders.

Trading in Transneft shares closed before the announcement. The stock was 0.6 percent down Tuesday, slightly underperforming the broader market.

Putin asked Vainshtok to head a state corporation being set up to manage preparations for the 2014 Winter Games.

"You've been running Transneft for eight years, and you've carried out a great deal of important work for our country in this time," Putin said.

Noting that Vainshtok's current contract at Transneft would expire Thursday, Putin said he would like him to oversee the multibillion-dollar task of readying Sochi for the Games.

"Thank you for your trust," Vainshtok replied.

The International Olympic Committee awarded the 2014 Games to the Black Sea resort of Sochi in early July. Putin had made the Games a priority of his administration, and the win is expected to give the country's economy a $15 billion boost.

The government has pledged around $12 billion toward developing Sochi into a world-class resort. Billionaires Vladimir Potanin, Oleg Deripaska and Roman Abramovich are all investing heavily in the region, as is Gazprom.

Vainshtok is seen one of the most professional Russian state managers because he doubled the country's oil export pipeline capacity in eight years, firmly establishing Russia as the world's second-largest oil exporter after Saudi Arabia. But some in the market have questioned the way Transneft allocates export quotas to oil traders, with some traders getting more favorable terms than others.

Transneft trans-ships all of Russian crude production of 9.9 million barrels per day via trunk pipelines and exports around 5 million bpd to world markets.

MT, Reuters