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The Ministry of Energy may agree to an additional issue of Transneft
Apparently, the government supports the possibility of holding an additional share issue of Transneft to finance current investment projects, which the company's management advocates. As the head of the Ministry of Energy Sergei Shmatko said yesterday (he is also the chairman of the board of directors of the monopoly), “the issue of placing shares continues to be considered.” However, the key point remains state participation in Transneft, which should remain in its current form. “We have no dogmas or prohibitions. It’s just that each option must be carefully studied and considered. But I want to emphasize that the issue of reducing the current state share in Transneft was not considered or discussed at all,” said Mr. Shmatko.The fact that Transneft is considering the option of increasing its authorized capital was announced at the beginning of the week by the head of the company, Nikolai Tokarev. Transneft has been unsuccessfully searching for investments in the Zapolyarnoye-Purpe pipeline project for several months now. A similar situation quite recently occurred with another oil pipeline - Purpe - Samotlor. The company also said that it could not find suitable sources of construction financing. Oil workers, who have repeatedly declared their interest in the project, according to Mr. Tokarev, are in no financial hurry to participate in it. Therefore, Transneft nevertheless found internal sources for the construction of the pipeline. “The oil industry received an offer from Transneft, but, unfortunately, it did not arouse any enthusiasm among them. They simply took note and, I believe, do not want to develop this topic further,” said Mr. Tokarev.
According to experts, the cost of the 600-kilometer Zapolyarnoye-Purpe project is about 70 billion rubles. “Currently, a draft government resolution is being prepared for the construction of the Zapolyarnoye-Purpe oil pipeline and in the Zapolyarnoye-Purpe-Samotlor direction. The first stage - Purpe-Samotlor - is already clear to everyone, work is underway, funding has been secured. And secondly, within the framework of this draft resolution, several options for instructions are provided, including for the Ministry of Finance, the Ministry of Economic Development and the Ministry of Energy,” stated Mr. Tokarev. Sergei Shmatko noted yesterday that the Ministry of Energy has not yet formulated its position on this issue. “No final decisions have been made on this issue yet. The issue of the source of financing should be considered only after all alternative options have been worked out and proposed,” said the head of the Ministry of Energy.
At the same time, minority shareholders of the company are in favor of the possibility of holding an IPO of Transneft. Prosperity Capital Management, East Capital International and Vostok Nafta Investment, which control about 17% of the company's preferred shares, in the middle of the month approached the chairman of the board of directors of the monopoly with a proposal to conduct an initial public offering of ordinary shares. “The IPO in the form proposed by its minority shareholders will, of course, remove the problem of financing some projects, including the construction of the Zapolyarnoye-Purpe pipeline. Although Mr. Shmatko’s words confirm the opinion of the company itself that the state should remain its main shareholder,” says VTB Capital analyst Lev Snykov. According to Bank of Moscow analyst Denis Borisov, although the government is not very interested in an IPO, it will still buy back the shares if the final decision to hold it is made. “It makes more sense to hold an IPO later, when the company has completed its major ongoing projects. If such a decision is nevertheless made, then, of course, the government will buy back the shares in order to sell them at a higher price in a few years,” the expert believes.