Iron ore, Russia Oil and Gas

Metalloinvest denied the plans of participation in Rosneft’s privatization

​Metalloinvest denied the information of a possible participation of its owner, A. Usmanov, in Rosneft’s privatization.
This information is false. Last week Znak.com reported referring to an anonymous source of a possible participation of A. Usmanov in the privatization of Rosneft.

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Lebedinskiy GOK and KUMZ to get equipment without paying VAT.

The RF Ministry of Industry and Trade completed the list of process equipment, analogues of which are not produced in Russia and the import of which is not subject to value added tax. The new list was approved by Decree №329 of the Russian government on April 9, 2015.
These changes are intended to support the following projects:

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Globaltrans extended negotiations with Metalloinvest, MMK and Rosneft

​The agreement with Metalloinvest was extended for the additional 19 months, until the end of 2016, with MMK – for the additional 12 months, until the end of 2019, with Rosneft – reconsidered and extended until the end of 2016.
Globaltrans Group in 2014 extended the negotiations with Metalloinvest, MMK and Rosneft, the company reports on the results of publishing its IAS report.
“The key service contracts were successfully extended in 2014, on the results of the year over 605 of the group’s net revenue from operations was provided by the long-term service contracts”, is reported.
Globaltrans transports metals, oil and oil products, coal and construction materials. The company’s shares are listed on the LSE. 54.5% of shares are in free circulation, N. Mishim, K. Nikolayev and A. Filatov hold 11.5% each via their special companies, the CEO of the operator S. Maltsev, 5.4%, non-executive director, A. Eliseev – 6.3%. The total park of the group is 65 thousand wagons and 75 locomotives.

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Kazakhstan :In January-November 73.7 million tons of oil were produced - a 1.3% decrease.

Volume index of the industrial production amounted to 100.1%. In January-November 2014 compared to the same period in 2013 the production of natural gas and non-ferrous metals increased, The Federal Office of Statistics reports.
73.7 million tons of oil including gas condensate were produced, this amounts to 98.7% of the corresponding period last year. Also the decrease in the production of gas oils – diesel fuel – was registered – 4.6 million tons (99.1% to the data of 2013).

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Rosneft to supply oil products to a number of leading industrial holding companies that provide import substitution

Rosneft has signed a partnership agreement in the field of petroleum products supply with Metalloinvest, SUEK, OMZ and UES FGC, the company reports.
The press release notes that the documents provide for joint research activity of the companies in the development, production and implementation of high-tech lubricants and petroleum products. In addition, it is expected to hold a joint audit of products, aimed at maximizing the efficiency of the use and production of a new line of oil products.

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In 2014, RosGeo can increase revenue by 15%

In 2014, RosGeo can increase revenue by 15% to 10.4 billion rubles, the Vice CEO for Economics and Finance, I. Silina says. Income from geological exploration activity of the company shares 95% in total revenue. RosGeo is going to increase net profit to 260 million rubles and EBITDA to 940 million rubles.
The forecast EBITDA is 9%, and profitability by net profit is 2.5%.
RosGeo did not make public its consolidated results in EBITDA and net profit before.
The forecast growth in revenue is explained by enlargement in the contract base, optimization and re-distribution of the priority work and more intensive work in Eastern Siberia and the Far East.

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Alrosa will be inspected

The Ministry of Finance, the Federal Agency for State Property Management and the Accounts Chamber willinitiate a complex inspection of Alrosa. They will check several large transactions of the company including its IPO in 2013. The inspection is sanctioned by the President of Russia V. Putin, and the initiative was made by the Vice Premier Y. Trutnev overseeing Alrosa. The destiny of the chief of the company F. Andreyev will depend on the results of the inspection; Mr. Trutnev seeks for his dismissal.
A source close to the situation has told about the order of Mr. Putin to hold the complex inspection of Alrosa. It was confirmed by one more source in the presidential administration. One of them claims that under the results of the inspection, the authorities will decide whether the President of Alrosa F. Andreyev will keep his post. The order is called ‘About the personnel affairs of Alrosa’; the document was signed on August 30th, the source claims. He refuses to state the period of the inspection or any other details, referring to confidentiality of the document.
A source of Kommersant in the Government claims that the inspection was initiated by Y. Trutnev who sent to the President a letter with explanation of his unwillingness to sign the directive about re-appointment of the chief of Alrosa. Mr. Trutnev doubts effectiveness of F. Andreyev as the chief of the company and suggests to inspect reasonability of the large transactions, the source states. A source in the related department confirms the fact of the letter. The sources of Kommersant claim that Mr. Putin supported the initiative and appended instructions that the personnel affairs of Alrosa should be solved after the complex inspection of the company by the Ministry of Finances and the Federal Agency for State Property Management with attraction of the Accounts Chamber. All the sides refused to give any comments yesterday.

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More than 40 large hydrocarbon fields in the Arctic are in Russian sector

More than 40 large hydrocarbon deposits in the Arctic are in the Russian sector. And next year, after submission of an application to the United Nations, Russia plans to expand its domain due to the Lomonosov and Mendeleev Ridges.
At the end of last year, Russia received the first batch of Arctic oil. The development of the Arctic shelf began from the development of Prirazlom field. In general, about 60 large deposits of hydrocarbons are in the Arctic, more than 40 of them are located in the Russian sector. Today Russia is now planning to expand its domain due to the Lomonosov and Mendeleev Ridges at the bottom of the Arctic Ocean. The corresponding application is expected to be submitted to the United Nations next year.

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Russia opens subsoil for foreign companies

The government may ease operation conditions of foreign state-owned companies in Russia. Until now, they could get in projects of strategic deposits development in the country not more than 25%. Primarily, this liberalization aims to attract investors from China, India and the Middle East. Primarily state-owned companies conduct international expansion just in these countries, and Russia will reorient to partnership with them in condition of conflict with the West over the Ukraine.
The Government has instructed the Ministry of Natural Resources, Ministry of Economy and FAS to consider whether to give foreign investors the opportunity to increase their share in companies, which develop subsoil plots of federal importance (large deposits of oil, gas, gold, nickel, platinum and copper) in excess of the limit, set by the legislation. This topic was raised by CEO of Metalloinvest Andrei Varichev at the Cabinet’s meeting on July 10; he offered to amend the law "in terms of increasing the possibility of the presence of foreign investors – certainly, through consideration by the Government Commission - from 25% to 49%". According to him, such measures are necessary for the development of large deposits, in particular to attract project financing.
Now, according to the federal law 57, there is a special procedure of foreign investments in companies that hold licenses for subsoil plots of federal importance. These companies are considered to be controlled by a foreign investor if it has a share of 25% or more.

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In 2013, Russia reduced expenditure on the exploration of solid mineral resources by a third

According to Ministry of Natural Resources and Ecology of Russia, Sergei Donskoy, in 2013 the amount spent on the exploration of solid mineral resources in Russia fell by 30% to 39.4 billion rubles.
At the same time, in 2013, the expenses of non-budgetary sources for reproduction of Russian mineral resources base increased by 37% as compared with 2012 to record level of 307.4 billion rubles. At the same time, costs of hydrocarbons exploration grew 1.5 times to 268 billion rubles.

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