Sechin and Kadyrov have agreed on the preservation of the assets of Rosneft in Chechnya

Sechin and Kadyrov have agreed on the preservation of the assets of Rosneft in Chechnya

“Rosneft” will continue to work in Chechnya and will not sell the Republic as their regional assets (the main one — of Grozneftegaz, which is 51% owned by the company, the rest owned by the Republic), agreed on 19 April chief Executive officer of the oil company Igor Sechin and the head of Chechnya Ramzan Kadyrov. This was told two sources in “Rosneft”. “It is a fact,” confirmed a source in “Grozneftegaz”.

April 19, Igor Sechin and Ramzan Kadyrov had a meeting, then they both met separately with the President of Russia.

As noted by one source in Rosneft, Sechin Kadyrov also agreed on the withdrawal of obligations “Rosneft” to build in Chechnya refinery (refinery).

At the meeting it was also decided that “Rosneft” will invest in social infrastructure of the region, including building housing, and it will pass in the municipal property. Those investments, he refused to name.

Photo: Valery Matytsin / TASS

The representative of “Rosneft” the meeting has not commented, a representative of Ramzan Kadyrov, the press Secretary of the President Dmitry Peskov was redirected to the press-service “Rosneft”. “This is a corporate issue and it should ask “Rosneft”, — said Peskov. A spokesman for Kadyrov, Alvi Karimov said only that the meeting was “very fruitful”.

Grozneftegaz, which is engaged in oil production in Chechnya is not the most significant of the assets of “Rosneft”. In 2016, according to CDU TEK, he got all 170,7 thousand tons of oil, or 0.08% of production of “Rosneft” for the year (210 million tons). The regional revenue of the company for the year 2015 amounted to 3.7 billion rubles, a loss of 171 million rubles, no more recent data.

Selling or retaining the asset will not affect the business of Rosneft is too small its size, says the analyst of Raiffeisenbank Andrey Polischuk. Production of “Grozneftegas” falls, and now the main task — to support it, said the Manager of the company. It is difficult and expensive because you need to drill a deep well, he explains. The cost of one borehole may reach 1.5 billion rubles., says the source . To produce oil in Chechnya will be another six or seven years, and then wells will be depleted, says a leading analyst of the company “Horizon” Vladimir rozhankovsky. To continue production for another 14 years, you need to invest about $1.5 billion, including the acquisition of equipment, he estimates.

“The history of the negotiations Sechin and Kadyrov’s private, we can only guess how they managed to conclude an agreement,” — said the Director of the International Institute of political expertise Evgeny Minchenko. However, the head of “Rosneft” has shown once again that is one of the most powerful in the political sense of the figures, says the analyst: “There are people who can negotiate with Kadyrov — that is, please Sechin”.

A conflict of interest

“Rosneft” and the terrible long debate about how to divide the Chechen oil assets that are currently owned by the Federal property management Agency and Rosneft for control over which the Republic fought since the early 1990s. In December 2015, Ramzan Kadyrov, asked Vladimir Putin to transfer to the Republic “Chechenneftekhimprom” (100% of shares from the Federal property management Agency) and received the support of the President, wrote “Kommersant”. “Chechenneftekhimprom” the Chechen authorities need to raised funds to build a refinery in the Republic that “will provide additional taxes, jobs, not to mention the development of the oil industry”, explained Ramzan Kadyrov (quoted by TASS). “For our region it will be a great success,” he argued.

Ramzan Kadyrov

Photo: Mikhail Metzel / TASS

Later, Ivan also decided to build on the land “of Chechenneftekhimprom” plant for the production of lithium-ion batteries (the agreement with the Korean KOKAM this was signed in 2014). In January 2016, the energy Ministry and Federal Antimonopoly service have agreed on a draft Directive on the transfer of 100% of the property of the Republic, reports “Interfax”. However, the process stalled “Rosneft”. The company leases most of the property “of Chechenneftekhimprom”, which is technologically connected with the assets of Grozneftegaz. Side several months discussing how to divide property, and in August “Rosneft” has offered to sell all the property “of Chechenneftekhimprom” the Republic along with all the other Chechen assets to Rosneft, wrote “Kommersant”. Another would be to have the option to transfer to the Chechen land for the production of batteries, in which no equipment needed “Grozneftegas”.

In 2017, PwC has assessed the assets of Rosneft in Chechnya 12.5 bn, but this estimate was outraged by Kadyrov. Assets are “dead”, and offer to pay for them 12.5 billion RUB looks “ridiculous”, he said in an interview to “Russia 24”. In the same interview, Kadyrov recalled another unfulfilled promise of Rosneft to build a refinery in the country. The construction of the plant under discussion since 2010, but it still has not begun. Construction of the refinery in the region unprofitable “Rosneft” and is only possible with co-financing from the budget, instead of the “Rosneft” offered to build a cheap bitumen refinery, said sources.

“Rosneft” does not want to see Chechnya “with open eyes”, as the post-war region, although Sechin — a great politician and statesman”, — said Kadyrov in an interview to “Russia 24”. “Such an attitude to us unjust, and we will seek justice,” he promised.

“We are deeply sympathetic to the fact that Ramzan Akhmatovich refers to the social problems of Chechnya, but we have no right to discount the value of assets to the detriment of the interests of our shareholders”, — said the representative of “Rosneft” Mikhail Leontyev. According to him, “valuation of assets was made to a respected company by PwC and fully corresponds to their market value”.

Igor Sechin has always been this position: oil assets in Chechnya should remain in “Rosneft,” said a source from the entourage of the head of “Rosneft”.

Knows another source in his round. The Federal center does not practice the transfer of the regional oil and gas assets, so maintaining the presence of Rosneft in Chechnya — the General trend, believes Vladimir rojankovsky. Ivan has plans to concentrate in the hands of oil assets and manage them, but help from the Federal budget far exceeds cash flows from crude oil, says the Director of the energy development Fund Sergey Pikin.