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Rosneft ready to buy state-owned shares in Novorossiysk port at market price

December 02, 2013, 22:14 UTC+3 YEREVAN

Sechin believes that "this will allow us to create infrastructure for servicing offshore projects in the Black Sea and improve control over the port’s operations"

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YEREVAN, December 02, 22:00 /ITAR-TASS/. Russia’s state oil major Rosneft is ready to buy government-owned shares in the Novorossiysk Commercial Sea Port at market value, Rosneft President Igor Sechin said on Monday, December 2.

“We are not owners, but we think that a purchase on market terms would be effective for both the seller and the buyer,” he said.

Sechin believes that “this will allow us to create infrastructure for servicing offshore projects in the Black Sea and improve control over the port’s operations.”

He said the oil terminal in Trieste, Italy, was charging 2.5 euro for offshore transportation and, considering transportation for 800 km into Europe, the tariff is 4.5 euro. The Novorossiysk Commercial Sea Port charges 16.5 U.S. dollars per 1,000 tonne of products, Sechin said.

The Novorossiysk Commercial Sea Port will be privatised before the end of the year through a market transaction, Minister of Economic Development Alexei Ulyukayev said earlier.

“We think that the privatisation should proceed in accordance with the best practices through a market transaction,” he said.

The minister confirmed that the sale of the sea port was in the privatisation programme for 2013.

First Deputy Prime Minister Igor Shuvalov said that the sea port would be sold before the end of this year. However Deputy Minister of Economic Development Olga Dergunova said in April that the privatisation of the sea port might not take place in 2013 because the documents were not ready.

Summa Group and Transneft own 50.1 percent of the sea port on a parity basis through the offshore company Novoport Holding Ltd. The federal government owns 20 percent, Russian Railways holds 5 percent, and the rest of the stock is free floating.

It was reported earlier that 30 companied had shown interest in buying the seaport shares. Subject to privatisation will be the 20 percent stake held by the federal government, without Russian Railways’ 5 percent.

Several companies showed interest in acquiring the seaport shares, including Sergei Shishkarev’s Delo Group, Vladimir Kogan’s Neftegazindustria, Ukraine’s Transinvestservice, and the investment fund Abu Dhabi Invest AD.

Ziyavudin Magomedov’s Summa Group, the current co-owner of controlling interest in the Novorossiysk Commercial Sea Port, may also bid.

Another holder of controlling interest, state-owned Transneft, said it had no intention of buying the sea port shares.

The Novorossiysk Commercial Sea Port (NCSP Group) is one of the largest European providers of stevedoring and port services. The Group is the third largest port operator in Europe by cargo turnover, and the undisputed leader in the Russian market.

The Group accounts for 29.3 percent of all cargo turnover through Russian seaports. The Company exceeded the country's second largest port by turnover, the Big Port of St. Petersburg, by nearly three times in 2011.

The company holds leading positions in transfer of crude oil (58.6 percent of total), sugar (70.8 percent), grain (29.6 percent), oil products (15.7 percent), ferrous metals (28.2 percent) and nonferrous metals (26.9 percent).

The port in Novorossiysk, which is a key gateway for Russian import and export cargo, handles about 52 percent of the Group's cargo turnover. NCSP Group accounts for 96 percent of the combined cargo turnover of stevedoring companies operating in Novorossiysk.

NCSP operates primarily at the Port of Novorossiysk, a multi-purpose, year-round, deep-water port located on the Russian shore of the Black Sea which has a rare combination of geographic, topographic and infrastructure advantages among ports in the Black Sea-Azov basin.

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