Novorossiisk board change ends spat over Russian oil port

MOSCOW Tue Feb 26, 2013 1:06pm EST

MOSCOW Feb 26 (Reuters) - An executive of Russian oil pipeline operator Transneft will become chairman of Novorossiisk, ending a standoff between the port group's major shareholders over investment at the major Black Sea oil outlet.

The management spat had triggered worries over possible disruption of oil flows through the Sheskharis terminal at Novorossiisk, which exports up to 45 million tonnes a year (900,000 barrels a day).

The compromise deal announced by Transneft on Tuesday is also likely to smooth an expected sale of a 20 percent stake in Novorossiisk Commercial Sea Port (NCSP Group) as part of a broader privatisation programme in Russia.

Transneft, which owns a 50.1 percent stake in Novorossiisk jointly with Russian investment and trading company Summa Group, took up battle with both of them in February. Transneft said private magnates running the company had failed to invest enough in Novorossiisk, the biggest port in the Black Sea.

Transneft, which operates Russia's 50,000 km (31,000 miles) oil pipelines network, uses the Sheskharis terminal for its oil shipments.

Under the compromise deal, Transneft Chief Financial Officer Maxim Grishanin will become chairman of the NCSP Group, Transneft said in a statement on its website.

It dropped its call to dismiss NCSP Chief Executive Rado Antolovic, who last week denied the allegations of underinvestment.

Transneft said a board meeting had been called for mid-March to discuss the development of Sheskharis, but the issue of management changes was now removed from the agenda as a result of the compromise deal.

"An issue of management changes will not be on the meeting agenda," Transneft said.

NCSP, which is controlled by state property watchdog Rosimushchestvo, also operates the Baltic port of Primorsk via Novoport Holding Ltd. (Reporting by Vladimir Soldatkin; Editing by Clelia Oziel)

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