Itera deputy chairman Sergey Vorobyev
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Russian Oil Cos. Paying Higher Interest
The largest Russian banks have raised the interest rate on credit in rubles to oil and gas companies from 7-8 percent to 11-13 percent annually. Second-echelon banks have raised their rates to 18 percent, and the rise may continue. That information was confirmed by Itera natural gas company deputy chairman Sergey Vorobyev, who said that Itera is now taking steps to reduce its debt load. The company has reduced its credit profile by 10-15 percent already and will have shed 25-30 percent of it by the end of the year. It will also sell off its oil assets this year, or next, if crisis conditions dictate. The company expects new high receipts of $1.9 billion this year (compared to $1.3 billion last year) and net profit of $200 million ($120 million last year).
Spokesmen for Trans Nafta, Gazprom, NOVATEK and TNK-BP also confirmed the interest rate hike. Deputy chairman of VTB bank Vasily Titov stated that interests rates at the bank have been raised for all clients, and a Gazprombank spokesman said that, while the interest rate that bank offers differs from client to client, the higher cost of foreign credit led to “corrections” in corporate crediting rates.
The situation is complicated by market conditions. The cost of a barrel of Russian Uralsk oil reached its peak in mid-July at $142.50 per barrel and fell 39 percent to $86.87 by mid-September. It has eased up to 30 percent below its high mark since then. The reduction of the export duty on oil helped the situation. Nonetheless, a number of companies plan to reduce their investment programs and debt loads this year and next. The Gazprom board is looking at its debts today. LUKOIL head Vagit Alekperov stated on September 19 that the company would delay some projects. A Rosenft source says changes in the investment program are possible there as well, and Gazprom Neft investment and efficiency department head Sergey Papenko has said that the company’s investment program will be cut by 10-15 percent. Nonetheless, Gazprom Neft corporate finance department head Alexey Kokorev noted that the company may take out up to $1 billion in loans before the end of the year to acquire new assets.
www.kommersant.com
All the Article in Russian as of Sep. 30, 2008
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