Igor Sechin: Fair value of Rosneft is $ 130 billion

Igor Sechin. © /

Photo: Mikhail Klimentyev

/ ria of news

“Sanctions are absolutely not an economic factor»

International rating Agency Moody’s on January 29 improved credit rating “Rosneft” to investment level “Baa3”. And in fact returned it after declining in February 2015. To the same level and credit rating of “Bashneft”. It turns out that the high volatility in the oil market, as well as the sanctions do not affect the high potential of the largest Russian oil company.

In the background is particularly clear that the current cost of “Rosneft” (as it evaluates the market) is unfair. Its main Executive officer Igor Sechin in an interview with Frankfurter Allgemeine Zeitung (FAZ) said it clearly: “Here we must note that the factors that led to cost reduction, are political decisions. In particular the introduction of sanctions against the company. This is absolutely not the economic factor, but he worked on capitalization”.

Sanctions not affected. Rosneft develops cooperation with Germany

Fair and real value, he said, is much higher. “We believe that objective assessment is approximately $ 130 billion. We primarily proceed from the quantity and quality of the resource base of the company, he explained. — If you compare public global companies in our sector, you will see that the number one resource base — the company “Rosneft”. The cost of our production is also very competitive: we spend about us $ 3. extraction of one barrel of oil.”

Investors understand this and appreciate the company for its production success. A striking example is the explosive growth in the value of shares of the company following the meetings, representatives of the company with investors in London and Singapore. After the presentation of the new development strategy “Rosneft” its papers were in leaders of growth on the major sites. In addition, major international investment banks have raised their recommendations on the stock to “buy” and target price (Credit Suisse, Citi).

From the beginning of 2018, the value of the shares of “Rosneft” has grown on the Moscow stock exchange is 21.7%, ahead of all competitors and the index of oil and gas companies of the Moscow exchange. In London over the same period, the value of securities of the company increased by 27.9%, significantly ahead of most international competitors and the dynamics of oil prices.

The German newspaper also notes that the company “has arisen literally from nothing”, but today it has “the largest oil reserves among the world’s companies whose shares are traded on the stock exchange.

From Western Siberia to Central Europe

The Germans used the products of Russian oil companies driving their cars during flights, reminiscent of FAZ. “Almost half of the supply to Germany of oil extracted in Russia, most of the import belongs to “Rosneft”. The refinery in Schwedt, a controlling stake which in 2016 is owned Rosneft, as well as to the plant in Leuna, which belongs to the French company Total, the oil is supplied from Western Siberia. Moreover, Rosneft owns a significant portion of the shares of oil refinery companies Miro and Bayernöl”, — writes the edition.

In the near future the Russian company plans to invest 600 million euros in the modernization and development of their oil refineries, and this, according to FAZ, will significantly increase its share on the European market.

In Germany Sechin was in this regard — along with Chairman of the Board of Directors of “Rosneft” by Hermann Schroeder he inspected the refinery in Schwedt, the results of which former German Chancellor called for an. Since 1963, there comes the oil pipeline “Friendship”. According to the head of “Rosneft” oil refinery in Schwedt demonstrates how “the infrastructure allows us to effectively deliver oil from fields in Western Siberia in the center of Europe, to ensure efficient processing, closer to the consumer market”.

He admits: “We sought to gaining control of the refinery in Schwedt, got a controlling stake, and we believe that this is one of our most successful projects in Europe”.

The growth of production and assets. What results Rosneft completes year

The politician or Manager?

All previous “Rosneft” Igor Sechin activities were somehow connected to politics. In this regard, the publication asked what he sees himself — as a politician or Manager.

“You know, this is a difficult question, — said the head of the largest Russian oil companies. — I think I’ve lived a few lives, are quite different. Therefore, to say unequivocally hard. But I think that the correct definition of a Manager. Good word. I think I would have determined his place — Manager”.

According to the newspaper, “it sounds modest for the head of the company with 280 thousand employees, which operates in many countries of the world and profit which is one of the most important sources of funding for Moscow.”It mentions political sanctions the US imposed for Sechin.

However, he believes the oil business political: “there is no policy, absolutely. The oil business is competitive. I am convinced that the main thing — it’s contractual obligations”. Sechin is proud of what he achieved at the helm of the company: “We something is possible, it’s true. When we started the company 18 years ago, it was producing 4 million tons of oil. Today it produces oil equivalent to 281 million tons. This is a good result.”

Where others fear

Over the years, reminiscent of FAZ, Rosneft increased the number of its own shareholders. A controlling stake of 50% and one share still belongs to the Russian state, about a fifth of BP. But recently agreed that 14.2% of the shares (from a package of 19.5%, purchased from Russia by the commodities trader Glencore and Qatar”s sovereign wealth Fund in the previous year) will receive a Chinese energy company CEFC China Energy.

The head of The company positively evaluates opening in connection with this perspective: “we Have joint projects on the territory of China. In their address, since this year, we will supply an additional 10 million tons of oil”.

This means that the supply in this country will increase by a quarter. “For us, it’s not bad. China is rising consumption. We will use all the possibilities our new partners to build on work with China,” — said Sechin. And immediately rushed to reassure the Europeans: “But troubles here should not occur. In Europe, we began to put much more — 168 million tons per year. We believe in the European market and will strive to keep their share.”

Rosneft: 5 years ahead. Up to 20% will increase the capitalization of the company

However, Rosneft expands its presence not only in the Asian region. “It goes places where other companies fear the risks in Iraq, Libya or Venezuela. Last year’s crisis-ridden national Venezuelan company PDVSA could receive from Rosneft a loan of 6 billion dollars”, — draws the attention of the German edition, which asked the head of the Russian company, whether he believes in the return of the money.

“Certainly, — said Sechin. But first, it’s not 6 billion , but less. And secondly, it’s not just a loan, and advance sales contracts. We do not see here any risks.

And this, too, was not a political deal? — did not let the reporter of the FAZ.

That’s just business and a very good, profitable business”.

By the way.

“We need and want to work together in the interests of peaceful coexistence,” the calls for dialogue with Russia the Prime Minister of Brandenburg Dietmar Woidke who was present at the refinery in Schwedt during the visit Igor Sechin. It is quoted by Der Spiegel magazine.

Shortly thereafter, on January 29, Woidke participated in the meeting of the heads of the East German Federal States in Berlin. All the participants voted for the abolition of anti-Russian sanctions.

The Prime Minister of Mecklenburg-Vorpommern Manuela Svetig said that sanctions against Russia has proven to be inefficient and had a negative impact on many enterprises of the agricultural and food industries, located in the länder of Eastern Germany.

And the Prime Minister of Saxony Anhalt Rainer Haseloff said the impact of sanctions on East German companies is greater than in the Western part of the country, and urged the future government to discuss the lifting of sanctions with Russia.

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