Investors suspect Sechin of wanting to control all oil production in Russia / V. Sharifulin / ITAR-TASS / SPIEF

Rosneft is interested in buying Bashneft, sources close to the latter's main shareholder, AFK Sistema, told Vedomosti. According to one of them, the state company even assessed Bashneft. The second did not say how he knew about Rosneft's interest, but added that Bashneft had not approached AFK with an official offer to buy it.

Growth will continue. Igor Sechin

President of Rosneft. "Rosneft's growth continues, we are not resting on our laurels and are now completing the process of buying out 100% of the shares of the gas company Itera, and buying the gas assets of the company Alrosa." June 2013, Interfax

"Bashneft"

Oil holding. Main owner – AFK Sistema (75.4% of votes). Financial indicators (IFRS, 2012): revenue – 532.5 billion rubles, net profit – 52.09 billion rubles.

A high-ranking official of the Ministry of Economic Development has heard about this, but emphasizes that nothing has been submitted to the company's board of directors yet. An acquaintance of its top managers and a major state banker also know about Rosneft's intention. However, Rosneft has not applied for money for the purchase either, the latter clarifies.

Rosneft management spoke about its interest in Bashneft and Lukoil at meetings with investment bankers and consultants even before the purchase of TNK-BP, for which the state company paid $44.38 billion and 12.84% of its own shares in March. This is what a financier familiar with the participants of these meetings says. According to Rosneft President Igor Sechin, these two companies are working “incorrectly” in contrast to Surgutneftegaz, he recounts.

Representatives of Rosneft and Lukoil declined to comment, and their colleague from Sistema said that he does not comment on rumors.

Last year, Bashneft completed its transition to a single share. And recently it became known that AFK abandoned the idea of merging it with RussNeft: Sistema is selling 49% of this company to structures close to Mikhail Gutseriev, but in return received an option to buy out RussNeft's Ural assets, which could increase Bashneft's production from 15.4 million tons in 2012 by about a quarter. Rosneft's annual production after the purchase of TNK-BP is an order of magnitude higher - 200 million tons.

But Bashneft owns some of the most modern refineries in Russia, notes UBS analyst Konstantin Cherepanov. Bashneft's refining-to-production ratio is 1.33. And Rosneft's, like most Russian companies, is only 0.53. If a state-owned company buys Bashneft, this ratio will increase to 0.58, the expert calculated.

Moreover, last week during the St. Petersburg Economic Forum, Rosneft signed an unprecedented contract with China’s CNPC to supply 365 million tons of oil over 25 years (14.6 million tons annually), which almost doubles exports to that country.

Therefore, Rosneft may be interested in expanding its resource base, especially at the expense of Bashneft's Trebs and Titov fields (around 140 million tons), Cherepanov adds. Although the existing production volumes of Rosneft and TNK-BP would be enough to fulfill their obligations under Chinese contracts, if necessary, some of the European supplies could be transferred to the eastern direction (in 2012, Europe accounted for about two-thirds of the state company's exports, or 42 million tons, but it had long-term contracts only with China), he stipulates. But the agreement with CNPC allows Rosneft not to worry about financing future acquisitions - it assumes an advance payment of more than $65 billion, which the state company is unlikely to use entirely to pay off its debts (around $70 billion in the first quarter). Yesterday, 100% of Bashneft was worth $11.37 billion on the Moscow Exchange.

If Sechin wants to buy any oil company, he will have enough arguments to convince the owners to sell it, notes Arbat Capital Managing Director Yulia Bushueva. Another thing is that it would be more expedient to first complete the integration with TNK-BP before starting new deals, she warns. In addition, large monopolies are harmful to the economy - before our eyes, a second Gazprom is being created on the basis of Rosneft, while it would be much more useful to restructure the first, Bushueva is sure.

"Igor Sechin has an impressive appetite!" exclaims Steven Dashevsky, managing partner of Dashevsky and Partners. It seems he wants to control all oil production in the country. "So, maybe we should immediately start negotiations on the takeover of Surgut, Lukoil and Tatneft?" Dashevsky asks ironically. "Based on the recent experience of the takeover of TNK-BP, there can only be one piece of advice for minority shareholders of Bashneft after this news: run, baby, run!"

Rosneft sets its sights on Bashneft