Putin gave the government two months to transfer to Chechnya oil assets

Vladimir Putin and Ramzan Kadyrov. Photo from the Kremlin website

Vladimir Putin instructed the government within two months to transfer to Chechnya the shares of OJSC Chechenneftekhimprom - one of the two largest oil producing assets in the republic. The head of state approved the transfer of this company back in 2015, but the process stalled due to the fact that Chechnya and Rosneft, which now runs the Chechenneftekhimprom, could not agree at the price of assets transferred by the republic. Igor Sechin's company estimated its property at 12.5 billion rubles, and Chechnya considered this amount the overstated.

Details

• The transfer of Chechenneftekhimprom (CHNHP) to the Chechen authorities is said in the decree that was signed on September 18 and posted on the website of the publication of official legal acts.
• Now the company is fully belonging to the Federal Property Management Agency, and manages it as Rosneft rental.
• Chechnya has been trying to regain control over oil and gas assets in the republic for many years. In December 2015, the head of Chechnya, Ramzan Kadyrov, asked Putin to return the Chechenneftekhimprom to the Republic. The president agreed.
• In order to receive the company, it was necessary to divide about 3 thousand units of the property of the ChNHP for the production and transport of oil with Rosneft, including 1113 oil and gas wells, areas with an area of ​​11.6 thousand hectares, two refineries, repair enterprises, oil production equipment, four oil bases and more than 500 km of pipelines. The PWC, by order of Rosneft, estimated the assets belonging to the oil company at 12.5 billion rubles, but the Chechen authorities did not agree with such an assessment and paused .
• Commenting on the news of the presidential decree, Ramzan Kadyrov wrote in his telegram channel that the news is important for the republic, since "property and lands owned by the CHNHP are not effective enough." According to Kadyrov, this is due to the need to attract significant investments to restore the destroyed capacities of OJSC.
• Mikhail Krutikhin analyst also speaks of the need to attract investments in the company: “The company can already make a profit, but you should not hope for development - this will require additional investments, which are still difficult to evaluate. If you expand, then I would not hope for oil, because its reserves in Chechnya are almost exhausted. Unless new owners will come up with an additional business. ”
• Chechnya reserves are estimated at about 60 million tons of oil. Oil production in the republic in recent years has declined several times and continues to fall. According to Rosstat, in January - June 2017, it fell by almost 35% compared to the same period in 2016. According to Krutikhin, all Chechnya is now producing 400 thousand tons of oil per year. According to experts, the effect of natural development of deposits increased the military conflict and the lack of investment in the 1990s.

Oil production in Chechnya. Rosstat data

• The authorities of Chechnya intend to build a plant for the production of lithium-ion batteries and a new large refinery and a new large refineries after the transfer of the Chechenneftekhimprom.

Vladimir Motorin, Egor Sonin