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By John Helmer in Moscow

Russia’s vice premier for energy and resources, Igor Sechin — who is also chairman of Rosneft, the state owner oil producer and lead exporter — met behind closed doors on the weekend with the heads of Russia’s oil and gas majors to discuss their refinancing problems.

State intervention to support the oilers’ debt rollover is likely to be followed by further support measures for the state-controlled tanker companies, which faces rising foreign debt bills for their tanker newbuilds. Sechin, who also supervises shipbuilding and ports, and is closed aligned with Gunvor owner, Gennady Timchenko, has recommended giving the oil companies a total of $9 billion via the state development institution, Vnesheconombank (VEB), so that they can refinance foreign loans over the next nine months. Analysts believe this will be divided into $1 billion for Gazprom, $1.8 bilion for TNK-BP, $2 billion for LUKOIL, and $4.2 billion for Rosneft. The final distribution of the funds will be decided at the VEB board, which is chaired by Prime Minister Vladimir Putin. The Russian oilers are believed to owe about $80 billion in foreign-sourced loans.

Gunvor has told Fairplay it is actively seeking finance to expand Timchenko’s stakes in the Baltic oil trades, including the new Ust-Luga terminal, rail transportation of oil, fleet operations, and independent gas exports.

State intervention is being justified by Putin and Sechin to sustain energy sector investment growth. Analysts say the process of issuing VEB loans will trigger a Russian scramble for consolidating asset control in the post-crisis energy sector, and in its transportation branch, both inside Russia, and also in Europe. This scramble will decide what will happen to the state owned Sovcomflot group, currently headed by Timchenko ally, Sergei Frank. A Timchenko spokesman has confirmed that Frank’s son Gleb is married to Timchenko’s daughter, Ksenia.

The sharp decline of Russian equity values assumes that the price of a barrel of oil in Russia’s export markets will drop to an estimated $50 to $60, industry analysts have told Fairplay. If this materializes, the industry will see a significant delay in sale of shares of the merged and privatized Sovcomflot and Novoship fleets, the analysts expect.

“According to the exchange quotes, the shareprice of Novoship has dramatically fallen,” said Kirill Kazanli, Troika Dialog analyst in Moscow, “even from the price of Sovcomflot’s minority share buyout offer. Sovcomflot proposed $3.36 per share, while the current price is around $2 per share. The market for these shares has simply disappeared.” Kazanali told Fairplay an international IPO for the Russian tanker group is now unlikely until 2010.

Announcements from the company and federal Ministry of Transport suggest that an IPO might offer a 15% stake. But Moscow sources believe the value of the merged company has been cut from initial estimates of around $3.5 billion to $2 billion. At this level, a public share sale would raise little more than $300 million, unless a private off-market placement can be arranged.

Alexei Bezborodov, editor of infranews.ru, told Fairplay the valuation cut reflects the oil price now, and tanker rates later. “I think their revenues are dependent on freight rates, not on oil prices. And freight rates don’t always correlate with oil prices, although now they do. There is a lot of news about the dramatic fall in freight rates and growth in tanker availability. But as Sovcomflot and Novoship both operate on long-term freight contracts, their revenues won’t be affected immediately. They have contracts roughly until May 2009.” According to Kazanli, excess capacity and falling tanker rates will strike as Sovcomflot and Novoship must pay for new vessels. “They have very big newbuilding portfolios for the next two to three years, and a long-planned expansion of tanker capacities. This is definitely not a very attractive configuration for the market for the next two years.”

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