Embattled oil firm Russneft looks close to being taken over by a state-friendly company as it faces Kremlin ire over its unsanctioned involvement in the Yukos affair, analysts said Tuesday. Russneft, headed by billionaire Mikhail Gutseriyev, is due to sell to Kremlin-friendly oligarch Oleg Deripaska for around $6.5 billion, Vedomosti reported Tuesday.
Analysts were split on whether Deripaska would hold the company for himself or sell it on to a state-run energy firm like Rosneft. Yet all agreed that Russneft, a midsized oil company, would soon fold into another firm. Both the company and Gutseriyev have been targeted with a series of tax claims.
Russneft denied any talk of a sale in a harshly worded press release Tuesday, calling the reports "provocation."
"Russneft officially states that it has not carried out and will not carry out any talks about a sale," the company said.
A spokesman for Deripaska's Basic Element holding said he was "not aware of any ongoing negotiations" between the firm and Russneft.
"Deripaska has long wanted to get into oil," said Al Breach, chief strategist at UBS.
Gutseriyev would quit his post as head of the company and be replaced by a Basic Element manager, Vedomosti said.
An unidentified source later told Reuters: "I think the company will have another president within a week."
The Federal Tax Service has targeted Russneft with a total of eight lawsuits against 11 companies that are or have been shareholders in Russneft. A Moscow court Monday upheld a 3.4 billion ruble ($134 million) lawsuit against the firm on tax evasion charges.
Gutseriyev, listed by Forbes magazine as having a fortune of $2.9 billion, was charged with fraud in May. In June, federal tax authorities froze an unspecified amount of the company's shares, prompting fears they would be nationalized. Vedomosti said Tuesday that 30 percent of the shares were frozen.
Gutseriyev is believed to own 70 percent of Russneft. He created the company in 2003 after leaving oil firm Slavneft, buying Slavneft assets on the cheap when the company was restructured. Slavneft is now 50-50 owned by Gazprom and TNK-BP. Gutseriyev received financial backing from Swiss-based oil trader Glencore and the company is still believed to hold claims on Russneft assets. No one at Glencore's office in Zug, Switzerland, was available for comment Tuesday.
Glencore earlier this year merged its aluminum assets with Deripaska's Russian Aluminum and Viktor Vekselberg's SUAL, creating United Company RusAl.
Chris Weafer, chief strategist at Alfa Bank, said Deripaska would likely buy the stake for Rosneft. "It's possible the assets might be acquired via a friendly intermediary as the first step. Rosneft will not want to be embroiled in any further criticism of its asset acquisition methods if it can be avoided," he said.
Rosneft scooped up all of Yukos' main oil production assets in forced bankruptcy auctions held after the company folded under claims of $33 billion in back taxes. Those auctions also led it to take on debt, Weafer said.
Russneft is believed to have drawn the Kremlin's ire, either for failing to willingly fold into a state-run oil and gas major or for purchasing Yukos assets coveted by state-run firms.
In 2005, Russneft bought Yukos' 50 percent stake in Zapadno-Malobalykskoye, a Siberian joint venture with Hungarian oil firm MOL. In 2006, it tried to buy Yukos' stake in Slovak pipeline company Transpetrol, but the Slovak government blocked the sale.
"We don't see much of a fit between Russneft and the portfolio of any other major Russian oil company," said Alexander Burgansky, an analyst at Renaissance Capital.
"But if that's what the government wants to happen, it will happen."
by Miriam Elder