Rosneft looking at Ventspils Nafta

  • 2003-10-23
  • By TBT staff
RIGA - The Russian state-owned oil company Rosneft stated last week that it was ready to consider purchasing shares of Ventspils Oil Terminal, the recently formed company that controls the Ventspils Nafta oil terminal.

Dmitry Panteleyev, a press official with Rosneft, told Dienas Bizness that Rosneft would consider an offer from the owner of the Ventspils oil terminal and that any decision would depend upon Ventspils Nafta's offer.
Panteleyev pointed out that Rosneft needed additional capacity for oil export as it had increased oil extraction and was preparing to launch several major drilling projects in the next few years.
Over the first nine months of this year Rosneft produced 14.4 million tons of crude, up from 12 million tons during the same period last year. The company has targeted 20 million tons for 2003.
Ventspils Nafta's press secretary Gundega Varpa said that the company was ready to begin talks with any company with a serious proposal. She said that Ventspils Nafta shareholders, including the state of Latvia, are looking for a strategic partner who could guarantee supplies of crude via the LatRosTrans pipeline to the Ventspils port.
A year ago Russia began decreasing deliveries by pipe to Latvia citing the need to fill its own terminal capacities first. This year no oil has been pumped through the pipeline, though Ventspils oil terminal management has managed to make up for a part of their losses by increasing deliveries by rail.
Meanwhile, the vice president of Transneft, Russia's state-owned oil pipeline monopoly, has continually said that the company had no plans to renew deliveries to Latvia, though he had hinted the company was prepared to consider buying a controlling stake in the Ventspils terminal.
The appearance of Rosneft, which is wholly owned by the state and largely controlled by Russia's Ministry of Fuel and Energy, could provide the breakthrough in the current gridlock surrounding oil transit in Latvia. After years of struggling and being picked apart by competitors, the Kremlin-backed Rosneft is currently enjoying a change of fortunes.
Earlier this month Rosneft, a vertically integrated oil major, struck an agreement to explore for oil in the Black Sea with France's Total, and the company also has rights to develop a lucrative oil field in Kazakhstan.
Any attempt by Rosneft to purchase Ventspils Oil Terminal would certainly be taken with the support of the Russian government, though it is unclear how Rosneft and Transneft would work out an agreement so that Rosneft could deliver its crude to Latvia via Transneft's pipeline system.
The Russian daily business paper Vedomosti on Oct. 16 wrote that Moscow-based analysts have estimated that Russian oil majors, which are now scrambling to find export routes for the additional crude they are producing, would be willing to pay $200 million - $250 million for control of Latvia's largest oil terminal.
The former head of Latvia's privatization agency, Arnis Ozolnieks, told Dienas Bizness that Russian companies were likely to be interested in Ventspils Oil Transit, but they were likely to barter down the price during negotiations.