OREANDA-NEWS. January 12, 2010. Russian businessman Mikhail Gutseriev, the former owner of Russneft, bought back 100% of the company from a group of Basic Element affiliates controlled by another Russian tycoon, Oleg Deripaska, reported the press-centre of OTKRITIE Financial Corporation.

There is still confusion about the terms of the deal. According to some sources, Gutseriev paid about US600m for 100% of Russneft, while other sources quoted in the press suggest that Gutseriev assumed part of the company’s debt without any extra cash payments. Russneft, a small-size vertically-integrated oil company, produced 12.69MMt (254MBD) of crude last year (2.6% of Russia’s total output).

Russneft controls a number of relatively small oil production companies, as well as the Orsk and Krasnodar refineries located in the south of Russia. It is important to note that the Sistema group has shown interest in acquiring a 40% stake in Russneft. At the end of 2009, Sistema filed a request with the Russian Antimonopoly Service concerning such a purchase. 

View: We do not rule out that companies controlled by Mr. Gutseriev could on-sell a 40% stake in Russneft to Sistema this year. Crude oil produced by Russneft would make Sistema-controlled Bashneft a more balanced, vertically-integrated company. Bashneft is currently short of crude: its refining capacity by far exceeds crude production. In the past, Sistema spokespeople have stated the company would review available M&A opportunities with an eye to increasing the scale of Bashneft’s business.