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Is The Pain Finally Over For Oilfield Services?

Is The Pain Finally Over For Oilfield Services?

Oilfield services providers are seeing…

Russneft Owners To Sell 15% Of Company

Russia Offshore

The Gutseriev family, owners of 75 percent in Russian oil company Russneft (not to be confused with Rosneft), a midsized player in the field, is selling 20 percent of their holding in the company. The stake represents 15 percent of Russneft’s capital and will be floated on the Moscow stock exchange by the end of the year.

The initial public offering is being arranged by Russian banks VTB and Sberbank, and brokers Aton and BCS. The pricing range of the placement will be announced at the end of this week, and the final price will become public two weeks from now.

Russneft’s head first spoke about a possible flotation of part of his stake in June, when he said he might offer 10 percent of his family’s holding in the company on the Moscow stock exchange.

The company, in which Swiss-based commodity trading and mining giant Glencore holds 25 percent, earlier this month announced it planned to raise its 2016 capital expenditure by 36 percent to US$260 million (17.1 bln rubles). In terms of production, the company said it aimed to increase its annual crude oil output to 73.3 million barrels by 2019, up from 51 million barrels now.

Glencore bought into Russneft in the early 2000s, when company founder Mikhail Gutseriev, the 16th richest man in Russia, according to Forbes, had money problems. Gutseriev was kicked out of Slavneft, and Glencore helped him fund the start of Russneft in exchange for a 46-percent stake.

Between 2002 and 2010, The Swiss-based conglomerate poured some US$2 billion into the company, which at the time ranked among the top 10 oil companies in Russia. Glencore, which itself went public five years ago, had stakes in a number of Russneft subsidiaries and the right to sell the oil it produced.

However, as the FT reported this July, Gutseriev decided to do some debt restructuring, swapping some US$1 billion debt Russneft owed another of his companies for shares in the oil company. The move saw Glencore’s interest diluted to 25 percent.

By Irina Slav for Oilprice.com

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