Translated material
Sechin discount
Deputy Prime Minister proposed stimulating the purchase of shares in state-owned companies
The largest Russian oil company, Rosneft, and the energy export monopolist, Inter RAO, may be privatized. Deputy Prime Minister Igor Sechin told reporters about this yesterday, answering a corresponding question. “I think it is advisable, but depending on the market,” said the deputy head of government. The curator of the domestic fuel and energy complex proposed to ensure the demand for securities of state-owned companies from the population by providing citizens with a discount.“We need to support the participation of the population in privatization. I would give the population a discount in relation to legal entities when purchasing shares,” Igor Sechin said yesterday. According to him, in the recent past there has already been a “very positive” example of a public offering - the first IPO of Rosneft. “We need to wait for positive conditions and sell even better,” said the chairman of the board of directors of the largest Russian oil company.
From the last words of the Deputy Prime Minister it follows that if citizens receive a “discount”, it will only be from a fairly high price. And the IPO held in July 2006 was “very positive” more for the state than for citizens. The placement took place at a price of $7.55 per share, and for example, yesterday trading on the MICEX closed at a price of 226.5 rubles. per share ($7.38 at yesterday's rate).
Igor Sechin, however, made a reservation that minority shareholders were faced with the high cost of servicing bank accounts and a significant trading commission. Almost all the dividends received by the lucky owners of Rosneft securities went to them. Previously, the government, as the Deputy Prime Minister noted, had already appealed to banks with a request not to charge fees for services from owners of small packages.
However, according to experts interviewed by Vremya Novostei, in order for the placement to be successful, it is necessary not only to change the procedure for interaction with minority shareholders, but also to wait for favorable market conditions. As Dmitry Alexandrov, head of the investment analysis department of Management Company Univer, explained, given the unstable situation on the market, it is unlikely that it will be possible to attract a large number of investors. At the same time, according to him, Rosneft has experience of a successful IPO, and the Inter RAO business can also be well presented to potential buyers. “In addition to the discount, a number of preferences could also be provided: no tax on the profits of minority shareholders received from transactions with securities; negotiate with brokers to reduce commissions. If in the end we manage to attract 100 thousand investors, then this will be a great success,” the expert believes.
The government is also planning to provide incentives to the oil companies themselves. For example, by the end of the year it is planned to consider proposals for the transition from the mineral extraction tax (MET) to the additional income tax (ATT). “There will be more opportunities for both companies and the budget,” Igor Sechin explained yesterday. He also did not rule out that the list of companies with access to the Russian shelf could be expanded in the near future. Let us remind you that today only Rosneft and Gazprom have the opportunity to develop its wealth. However, as the deputy head of government complained, over the past two years the Ministry of Natural Resources has issued only five licenses on the shelf, “and then under pressure.” “Let them work more actively themselves. We suggested that they speed up and intensify this work,” said the curator of the domestic fuel and energy complex.
At the same time, in addition to incentives, the Deputy Prime Minister also had several instructions for oil workers. He hurried the shareholders of RUSIA Petroleum to make a decision on the Kovyktinskoye field. “For now, we are monitoring the development of the situation, communicating with shareholders, asking them to speed up their decision-making and reach an agreement with each other. But we won’t be able to wait very long,” Sechin warned. However, despite the failure to comply with the terms of the license and the suspension of the development of the field, in order “not to undermine the position of shareholders in the market,” the authorities will for now “tolerate the disgrace that is happening there” (see Vremya Novostey on March 24).
In addition, in order to fulfill their obligations to fill the promising Samsun-Ceyhan pipeline with oil, Russian companies, according to Mr. Sechin, will be asked to pay more attention to this supply direction. “Apparently, we will ask companies that operate on the Black Sea shelf and the Caspian Sea to keep this route in mind for transporting oil. Here we meet mutual understanding,” Sechin added. Let us make a reservation that the Ministry of Energy will take over control of all export raw material flows in the foreseeable future. The department will become the operator of the Oil Control system, which involves the formation of a unified export schedule for the supply of oil and petroleum products, as well as the introduction of a register of producers and exporters of petroleum raw materials and petroleum products. It is worth noting that transporters will only be able to accept raw materials from companies included in the coveted regulations. Moreover, exports will be carried out only through those shipping points and in those volumes that will be agreed upon with the operator. It is planned to agree on all the parameters of the new system by the end of summer.
Gazprom and CNPC will agree on a gas price formula by September. “We are working in China. By September some kind of preliminary formula is possible, I hope,” Deputy Prime Minister Igor Sechin told reporters yesterday. At the end of 2009, Gazprom Export and a subsidiary of a Chinese corporation signed an agreement on the basic conditions for gas supplies from Russia to China. The document defines the basic commercial and technical parameters of Russian gas supplies to Chinese consumers. Deputy Chairman of the Board of Gazprom Alexander Medvedev stated that the concern does not exclude the possibility of starting natural gas supplies to China in 2015. In addition, as the deputy head of government said, the Russian gas monopoly is negotiating with Korean companies to participate in the project for the development of the West Kamchatka shelf block. “We invite Korean companies to cooperate,” said the Deputy Prime Minister. He noted that if the negotiations are crowned with success, “we will be only happy.” Before Gazprom, exploration on the Western Kamchatka shelf was carried out by Kamchatneftegaz - a joint venture of Rosneft (60%) with Korean partners, the main one of which is KNOC. In 2008, Kamchatneftegaz’s license for this block expired and was not renewed. Soon the license for the block was granted to Gazprom. The gas concern stated that its license does not contain conditions to consider Korean companies as necessarily participants in this project, but Gazprom is still negotiating with Korean colleagues about the possibility of cooperation in this project.