"Old Love"

Alexander Korsik became president of the Itera group of companies

A series of changes that have rocked Itera recently have led to another unexpected personnel decision. The permanent head of the group of companies, Igor Makarov, transfers management functions to the former top manager of Sibneft, Alexander Korsik, and he himself will focus on “strategic issues of activity.” Officially, the new president of the group must make Itera “one of the most efficient industrial corporations in Russia.” At the same time, over the past few years, Mr. Makarov has been diligently looking for buyers for this business. And Mr. Korsik can either help find the once leading gas trader a reliable owner, from the state’s point of view, or (more likely) ensure the interests of new beneficiaries if the deal is already in progress. We can only say with a great deal of confidence that the entry into the oil and gas business of a group of foreign investors, for example, Indians, with whom Mr. Makarov conducted intensive negotiations, is now a thing of the past.

According to official information, Itera began operating in the gas market in 1994. However, it became a real player with a large volume of supplies only towards the end of the 90s. The then management of Gazprom intensively pumped this private company with assets, giving them away at a non-market price (as the new management of Gazprom subsequently decided) at a price. Thus, Itera received control of Tarkosaleneftegaz (East-Tarkosalinskoye field with a maximum production of about 15 billion cubic meters), Purgaz (Gubkinskoye, about 14 billion cubic meters) and Sibneftegaz (Beregovoye, 12 billion cubic meters), as well as a contract for the supply of 10 billion cubic meters of Turkmen gas to the markets of the former Soviet republics. In 2001, these “resources” were supplemented by the status of an operator for the transit of large volumes of Turkmen gas to Ukraine, with the ability to sell about 13 billion cubic meters on the market of this country.

Subsequently, Tarkosaleneftegaz came under the control of the Samara group Novafininvest and became the base enterprise of NOVATEK. Itera received a 5-year contract to purchase half of the gas (about 7 billion cubic meters) at preferential prices. Itera was forced to return a large stake in Purgaz to Gazprom, also retaining the opportunity to purchase half of the gas produced at the Gubkinskoye field. The group was never able to put the Beregovoye field into operation and in the summer of this year agreed to transfer 51% of the shares to Gazprombank. The terms of the deal are unknown, but, according to some reports, as a result of it, it will receive part of the gas for supplies to the Sverdlovsk region. Just four years ago, Itera lost Turkmen gas and was consistently forced out of the markets of the CIS and Baltic countries.

Having lost its position in the gas market, it nevertheless retained some assets (49% of Purgaz and now 49% of Sibneftegaz), as well as the market of the Sverdlovsk region with a capacity of 18 billion cubic meters. The profit in this sector is purely symbolic, but the financial flows are quite tangible. Sales revenue in the first half of 2006 amounted to 12.3 billion rubles ($470 million). In addition, the company has several licenses for small oil fields in Kalmykia, Stavropol Territory and Khanty-Mansiysk Okrug. It is on the development of the oil component that Mr. Makarov promised to focus, given that the gas sector is completely dependent on Gazprom, both in the literal and figurative sense.

Mr. Corsic is well acquainted with the specifics of oil. Since 1999, he worked for Sibneft for six years as first vice president. However, he did not accept the offer to remain on Alexander Ryazanov’s team after Gazprom acquired the oil company. Before joining Itera, he worked as deputy chairman of the board of the investment company Renaissance Capital. He gave his consent to head the Itera group of companies personally to Mr. Makarov and explained this decision to Interfax with his “old love for the oil and gas business.”

The new president of Itera graduated from Moscow Higher Technical School. Bauman and the Diplomatic Academy under the USSR Ministry of Foreign Affairs. In the early 1990s, he was sent to London, where he worked first as the third secretary of the USSR Embassy in Great Britain, and then as the first secretary of the Russian Embassy. In London, Alexander Lebedev, now a State Duma deputy, and Andrei Kostin, now the head of Vneshtorgbank, worked under his leadership.

Alexey GRIVACHS