Gazprom head Alexey Miller (left) and Rosneft president Sergei Bogdanikov (right) at an economic forum in Tokyo on November 20, 2005.
Photo: Dmitry Azarov
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A Big Capitalist Thank You
// The Kremlin Holds a Reception for Buyers and Sellers of Rosneft
On Friday Russian President Vladimir Putin held a closed meeting with the leaders of the international companies who participated in Rosneft's IPO. Mr. Putin revealed that his sympathies lie with the oilmen in the global competition between Rosneft and Gazprom for credit funds from Western banks in 2007 by steadfastly directing his audience's attention to the growth in Rosneft's capitalization from $80 billion to $92 billion. After the meeting, which lasted no more than an hour, the international guests were shipped off to the Pushkin museum for a banquet in the company of Roman Abramovich, Oleg Deripaska, and Vladimir Lisin, but without the Russian president.
The list of attendees included Dresdner Bank Kleinwort Wasserstein CEO Herbert Walter, Morgan Stanley CEO John Mack, Petronas vice-president George Ratilal, Barclays Capital board of directors chairman and CEO of JP Morgan William Winters, former CSFB CEO and current chairman of the executive committee at Barclays Capital Hans-Joerg Rudloff, Sinopec board of directors chairman Chen Tonghai, Alfa-Bank president Peter Aven, and Sberbank board of directors chairman Andrei Kazmin. They all have one thing in common: they participated in Rosneft's initial public offering in summer 2006 (DrKW, Morgan Stanley, Barclays, and JP Morgan provided the biggest chunk of investment). Friday's meeting was conceived by presidential aide and Rosneft board of directors chairman Igor Sechin and Rosneft president Sergei Bogdanchikov as nothing short of a triumphant reception for the company's foreign investors.
The bank ABN Amro, which was not officially listed among the companies invited, confirmed that its representative had attended, but in response to Kommersant's requests for comments refused to say anything further. "How did you find out about that?" replied a bank representative.
The only participant who was forthcoming with information on the proceedings was President Putin himself, whose press service announced the event and published the speech he gave during the open part of the meeting. In his speech, Mr. Putin briefly described the Russian economy's perspectives for development, paying particular attention to the government's priority of lowering annual inflation to 4-6% within the next few years.
Despite doubts voiced by several of Kommersant's sources concerning Mr. Putin's real – i.e., economic – motives for the meeting, two participants in the proceedings later told Kommersant that the meeting really had been all about "thank you's" from President Putin for the companies that had supported Rosneft in its IPO. However, if nothing else the Russian president undoubtedly wanted to show that his support for all things Gazprom does not mean that Rosneft has been forgotten. Both companies are viewed on the world market as guzzlers of capital: their credit needs are estimated at $15-25 billion per company. Continued foreign support is thus critical for the success of their public ventures, despite credit caps for 2007 of $25-30 billion on investments by Western banks in large Russian companies.
Dmitri Butrin and Maksim Shishkin
All the Article in Russian as of Oct. 30, 2006
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