 RUSSIA IN FACTS |
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Door to Russian oil may be slightly ajar: Dealmaking can begin again only when international oil majors detect clearer signals from Moscow, writes Carola Hoyos
When Yukos and Sibneft, two of Russia's biggest energy companies,
announced their intention to merge last April, international oil executives
could almost hear the creak as the door to Russia's vast oil fields
closed a bit further.
BP, the world's second-largest oil company by market capitalisation, had
already snapped up TNK in the biggest cross-border deal in Russia's
history, sending the UK-based energy group's competitors scrambling to
bolster ties with Russian rivals. But the completed Yukos-Sibneft merger
formed a behemoth with a Dollars 35bn market capitalisation, forcing all but
the biggest - ExxonMobil - and the most desperate - ChevronTexaco - out of
the running.
Following last week's decision by Roman Abramovich, the Russian
billionaire and owner of Sibneft, to halt the deal, the door to Russia may
now be opening again. At the same time, recent events have increased
Russia's risk profile, in particular to cautious American boards.
"We are back in the situation when Sibneft was being marketed and there
were a number of players on either side of the table," said one banker.
Analysts, bankers and oil executives agree that the dust kicked up in Russia
will have to settle before fresh dealmaking gets under way. Yet oil companies
are now looking for the right opportunity to call Russian billionaires such
as Mr Abramovich and reiterate their interest in helping them liquidate their
sizeable stakes.
"If ExxonMobil, ChevronTexaco or anyone else thought buying a stake in
the merged company from an oligarch would be straightforward . . . think
again," said JJ Traynor, analyst at Deutsche Bank. He adds, however,
that with ChevronTexaco and ExxonMobil able to afford the Dollars 11bn
company and TNK-BP keen to take part in future Russian consolidation, Sibneft
may now "be in play".
One company likely to be watching Sibneft closely is Paris-based Total, the
world's fourth-largest listed oil company, which was said to have been
closest to striking a deal for a minority stake in Sibneft just before Yukos
announced the all-Russian merger.
Insiders say Total and ChevronTexaco, the US's second-largest energy
group, which had already done much due diligence as it competed with
ExxonMobil for Yukos's ear, remain interested - especially, said one
executive, now that shares of Russian oil companies have fallen. "There
was a bubble and clearly the bubble has burst," said a senior oil
executive. Still, he insisted, no company would rush into Russia under the
current unstable climate.
Nevertheless, ChevronTexaco has maintained contact with Yukos even after the
arrest of Mikhail Khodorkovsky, the company's chief executive, in
October. Since then, Yukos's shares have dropped 24 per cent and Sibneft
has lost 13 per cent.
But another senior executive cautioned: "Most people are waiting to see
what happens. Some may wait for the presidential election next year. No one
is rushing into deep negotiations."
Bankers say ChevronTexaco is waiting for clarity over whether Yukos will be
carved up and parcelled out. Vladimir Putin, Russia's president, must
also explain what his policy on allowing international oil companies access
to Russia's resources will be if re-elected.
Russia's fundamental appeal has not changed. Most major international
oil companies - excluding Total - have had trouble replacing depleted oil
reserves. The vast Middle Eastern oil and natural gas fields remain largely
off limits and most exploration elsewhere has come up short.
Russia boasts an estimated 60bn-150bn barrels of oil reserves and Soviet-era
wells that could gush more oil if given a makeover by international oil
companies. It is still unclear whether the Yukos-Sibneft merger will be
unravelled, but the possibilities are hard to ignore - even amid the
confusion.
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