Rosneft to sell Chechen assets for $215m

Rosneft to sell Chechen assets for $215m

Rosneft has presented assessment of its assets in Chechnya to the Ministry of Economic Development, wrote Kommersant. According to the newspaper, the company is willing to sell 51% of Grozneftegaz as well as the rest of its property in the region for 12.5 billion rubles ($215m).

Rosneft is willing to sell 51% of Grozneftegaz as well as the rest of its property based in Chechnya to the Chechen Republic for 12.5 billion rubles. The oil company presented the assessment of its assets to the Ministry of Economic Development, wrote Kommersant.

The publication cited unnamed sources saying that the government has not given the final answer concerning the decision, but it is just a matter of time, and the division of assets between Rosneft and the republic is entering the home stretch.

PwC assessed Rosneft’s Chechen assets to be worth about 11.8 billion rubles. The report mentioned 725 million rubles invested in a refinery plant in Chechnya that has never been built.

In December 2015, Russian President Vladimir Putin supported the proposal that came from Chechnya’s Head Ramzan Kadyrov, who said the Republic could buy the assets belonging to the Federal Property Management Agency’s Chechenneftehimprom (CNHP). Chechnya was to receive 100% of the CNHP provided the Republic would divide about 3 thousand property units belonging to the company producing and transporting oil with Rosneft that rents them.

Late in June 2016 Russian Prime Minister Dmitry Medvedev excluded the company from the 2014-2016 privatization plan, which technically started the transfer procedure.

Rosneft offered two scenarios of Chechenneftehimprom asset division to the Ministry of Economic Development last September. The first one suggested allocating a piece of land to Chechnya to build a factory of lithium-ion batteries, while passing CNHP shares to Rosneftegaz, the owner of Rosneft’s controlling stake. The second option was to sell the shares of Rosneft-controlled Grozneftegaz operating on CNHP’s leased assets at the market price to an investor or to Chechnya.

Discuss

Recommended

1 / 3