"Rosneft has turned into a strange enterprise"

Economist Vladimir Milov - on the reporting of the state -owned company, schemes of its work and ambitions Igor Sechin

On March 3, it became known that Rosneft sued three publications at once: “important stories”, Bloomberg and “New Gazeta”. Among other things, the state -owned company did not like the article by Maxim Averbukh, published in the “new” “Sechin hurry to the rescue”, which was about the financial results of Rosneft for 2020. We decided to return to this topic and asked the economist Vladimir Milov to express his opinion on the achievements of the state -owned company.

- In a conversation with President, Igor Sechin noted that Rosneft is the only oil and gas main, who in 2020 received net profit (147 billion rubles). How is it possible - taking into account the pandemic and the collapse of oil prices?

- The loss of Rosneft was only in the first half of the year, when oil prices fell and the ruble has depreciated. And the third and fourth quarter turned out to be pretty good, Rosneft had a fairly good operating profit. At that time, the price of oil Brent and Urals rose to $ 43–44 per barrel. At such prices, the company could not have a loss.

The fact is that Rosneft did not get the main item, transportation and processing, but the purchase of oil. Roughly speaking

In addition to the mining company, it became a trading structure. They resold a lot of Venezuelan and other oil in the world market. And the purchase of oil from them has become the largest cost item.

Before the crisis, this was a big disadvantage (in terms of income), as it reduced profit, but in the crisis it was a plus, because they were able to drop it very quickly: they had a decrease in costs under the article “Oil Buying” last year last year. That is, they dropped more than half of these costs, and due to this they were able to support a very good operational profit.

- How is Rosneft in this sense different from other world companies?

- “Rosneft” differs from the same Shell, BP or Exxonmobile in that they have global business and high production costs. They invest in deposits and work a lot in regions with expensive shelf booty. In the case of Rosneft, the difference is that she has extremely low production costs, about 3 dollars per barrel in the well. This is the so -called Lifting Costs.

The production cycle with which global meaggers work is this: to invest a lot of money in deposits in the Gulf of Mexico or in Angola with high costs. Rosneft has practically no such thing. They work mainly in West Siberian deposits, and this is the lion's share of their prey, where the costs are very low, so

It is not surprising that they look better than global make -ups.

On the other hand, Rosneft in recent years participated in various transactions that created strong distortions in the reports. It is one thing to extract and export oil, but in addition, they do a lot of things. One of the components is an article in the purchase of oil. I wondered why they need it - to reduce the profit in this way. In the international market they buy a lot of oil at world prices, that is, they do not produce, export and sell, but buy - mainly from Venezuela, and not only (they do not disclose the full list of countries). The question is, why should they do this?

Under Sichin, Rosneft turned from a company for the extraction and export of oil into a strange enterprise for me, which, among other things, has some other transactions, the meaning and nature of which is not very clear to me. For example, they began to buy TNK-BP at a prize price +40% of the market value, it is not clear why. Then they had another deal, such as the purchase of Bashneft. Or the recent sale of 10% East Oil Trafigura, after which they immediately bought something else that does not work from Khudainatov for a lot of money.

- They say that the transaction on East Oil could be paid by the loan issued by the Russian Bank.

- I suppose that one hundred percent of this transaction was paid from Russia: if Trafigura would pay at least $ 1 for this deal with East Oil, then, according to the reports of the Central Bank , it would be seen that this money came to Russia in December, but nothing came to Russia in December, even went away. This means that, most likely, in general, all the money in paying for the purchase of Trafigura 10% East Oil was of Russian origin. That is, this part was given by Russian banks. I do not know how the rest was financed. Perhaps there were some of their agreements with Rosneft, for example, they could give Trafigura a contract for trading and set off future revenue. I do not know this, but this transaction, in my opinion, was 100% funded from Russia.

- This resembles the story of the privatization of the Rosneft stake in 2016, when Russian banks financed the purchase of a state -owned company's share in 19.5% by the International Consortium.

-Then Rosneft itself did not participate in this, they found a bridge structure created by Glencore and the Qatari investment fund, which bought their promotions from the government. But the scheme is very similar. The same scheme was used there when foreigners buy, but they are lended mainly by Russian banks, and this, in fact, is Russian money. It looks like an international transaction, but in fact, in my opinion, this is not so.

In this regard, of course, both stories have a lot in common. Although we do not understand the full picture. What were the agreements there? Why did Glencore and Qatarians participate in the purchase of this package? It is still unclear. They paid a lot of money, but at the same time they do not actually affect the management of Rosneft for more than 4 years. The question arises: why do you need this? But there is no answer to him.

- Do you have a hypothesis about who could be beneficial?

- I assume that Sechin, like any head of an oil state company, would like to become its co -owner. And by the way, in 2020, Rosneft received 9.5% of its shares in exchange for Venezuelan assets. It seems to me that, obviously, he did not like the very idea that he was just a manager hired by the state, he would like to be a shareholder, a partner, so that he would sit at a table with a “state” as a shareholder whose rights should be taken into account.

So that the authorities give him not instructions and directives as a general director, but to listen to him as a shareholder.

The package that Glencore and Qatarians received is a slightly more complex scheme, but developed in the same direction. Glencore and the Qatari Investment Fund “front” this deal. Glencore has already come out [out of promotions], and only Qatarians remained there. It is obvious to me that these companies are just intermediate links, and the package is moving to ensure that someone from management receives control over it.

-Back in 2016, rumors were rumored about the possible receipt of 9.5% of the shares by subsidiaries Rosneft as quasi-skis . Then it didn’t work out, decided now?

- Yes, this is about the same, that is, all this looks, as if they are trying in different ways to get large stakes for management control. Through the Venezuelan transaction, 9.5% of Rosneft had already received a year ago, and management votes with these shares. I admit that the scheme with Glencore and the Qatari investment fund is from the same opera, only a little more complicated. This path is not finished yet, but he will go there.

-In the spring of 2020, oil was almost completely reset. Western countries try to switch to "green energy". Rosneft management does not fear that strong drops in oil prices will be frequent?

“They are stable for this.” When you have oil on the well $ 3, even $ 30 per barrel on the market is not a disaster for you. The only variable in this equation is the transportation price. By the way, if you look at the chronicle last year, the first thing Sechin did when oil prices collapsed was, he came to Putin and asked him to reduce Transneft's tariffs. And this is what oil workers always do when oil falls to such low values.

But the price grew quickly, and Transneft's tariffs decided not to reduce. But, in principle, Transneft's tariffs are growing, and the company makes a very big profit. In general, oil workers know that if the price falls, they can seek transneft to pluck a fat, but even $ 20–25 per barrel is not a catastrophic price for them, taking into account the fact that production costs are low.

And, secondly, if you listen to Sechin, then he does not believe that there will be a catastrophic drop in oil prices. He believes that oil will grow that all these conversations about the “green energy” are exaggerated, that for a long time oil will be in demand and even increase in demand-first of all, because of Asia, that is, India and China, which are slightly slower to “green energy” than the countries of the West. Therefore, their (Rosneft management) the theory is that there will be no quick collapse of oil price, and they will be able to sit on oil rent from cheap deposits for a long time.

Anna Titova - especially for "New"