Will Rosneft Appeal to Court? - 25 December, 2002

Sergey Bogdanchikov is claiming to Slavneft all the same

Despite the protests of the RF Government, the state-run company Rosneft is going to contest results of the Slavneft privatization at court. Rosneft president Sergey Bogdanchikov declared it on the air of the radio Echo Moskvy. He explains the decision to appeal to court with the fact that the government suffered an economic damage when Slavneft was sold only for 1.86 billion dollars, which was just 160 million dollars more than the initial price. However, observers say that Bogdanchikov’s emotions are explained with quite a different fact: it seems that Sergey Bogdanchikov failed to carry out an order given to him.

Rosneft's intention to buy a share holding of Slavneft wasn’t a bluff or a speculation for the rise. The Rosneft president says that the company actually participated in the process. First of all, Rosneft was interested in the oil extractive facilities of Slavneft situated in Eastern Siberia and its oil refining facilities. Sergey Bogdanchikov says that there is no issue that cannot be contested, especially when the material damage caused to the state is so obvious.

According to the Rosneft president, one of the companies that represented interests of the oil company at the auction, “Promproekt” company, was ready to pay about three billion dollars for 75% of Slavneft shares. At that, this was not money of the government (as the government attempted to demonstrate), this was the money accumulated especially for the auction. However, neither “Promproekt”, nor the “Finansprofit-expert” company (it also represented Rosneft interests at the auction) were allowed to the auction. As a result, “Investoil”, a company known to nobody, bought Slavneft shares in four minutes after the auction’s beginning. “Investoil” is the company that represents interests of the Sibneft and TNK oil companies.

Rosneft president Sergey Bogdanchikov doesn’t mean it was a collusion, or the fact that interests of only one party of the auction were lobbied by the governmental officials. Right after the auction, Russian mass media suggested several versions explaining the situation. Despite the declarations of governmental top officials saying that the government got approximately the same proceeds as it expected, the press is perfectly sure that organizers of the auction played into one goal only. At that, the opportunity to get more money for the company was lost; moreover, the deal itself marred Russia’s image and caused damage to the economic reforms it carries out.

Sergey Bogdanchikov is sure that the auction’s results must be obligatorily contested in court. Rosneft plans to register its first claims against the RF Fund of State Property.

Ahtyam Ahtyrov

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Author`s name Michael Simpson