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Zarubezhneft Took Over Russia’s Share
Zarubezhneft will increase the authorized capital nearly 12 fold by releasing for government new stocks worth $1.5 billion in settlement for Russia’s share in Vietsovpetro venture. The ownership of first big asset will notably widen the company’s chances to raise loans and fund ambitious projects.
Federal Financial Market Service announced it registered 37.6 million new common stocks of Zarubezhneft worth $1.504 billion. As a result, the authorized capital of the company will step up 11.6 fold. According to Zarubezhneft, the new stocks have been released for the government to pay up the stake in Vietsovpetro venture, and the government’s ownnership in Zarubezhneft will remain same 100 percent once the placement is completed.
Vietsovpetro holds licenses for seven fields in the shelf of southern Vietnam. It produced 9.6 million tons in 2006, but the 2010 output is estimated at 5.26 million tons.
Zarubezhneft’s intention to take over Russia’s stake in Vietsovpetro was reported late past year. So far, the company has been only the project operator, receiving no more than 0.7 percent of the profits, while Russia’s share in the venture’s profits is the tempting 13.5 percent.
Now, however, Zarubezhneft has the chance to benefit from the new funds. Its chief, Nikolay Tokarev, who is the friend of President Vladimir Putin, has been continuously complaining that the revenues generated by Zarubezhneft don’t suffice to have interest in some big projects. The company’s desire is to participate in Russia’s shelf development.
In 2006, Zarubezhneft undertook investment liabilities worth ˆ1 billion related to buying refining assets in Bosnia, made a contract with ALROSA and Angola’s firms for joint exploration and development of oil and gas fields in the country and sealed the PSA to develop the Myanmar shelf. On September 11, Zarubezhneft and PetroVietman inked a memorandum to set up a venture in Russia. Moreover, Zarubezhneft is eyeing the shelf of Bahrain and has an option to buy out 25 percent in Kurmangazy project in Kazakhstan. Vietsovpetro intends to invest $4 billion to $5 billion by 2011 to fight the production decline.
www.kommersant.com
All the Article in Russian as of Sep. 27, 2007
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