November 3, 2017 / 2:34 PM / a month ago

Russia's Sberbank withdraws report critical of Rosneft - sources

MOSCOW, Nov 3 (Reuters) - Top Russian lender Sberbank has withdrawn a research report into the oil and gas industry in which it questioned the quality of corporate governance, level of debt and profit at the country’s largest oil producer, Rosneft.

Two sources familiar with the matter said the report had been withdrawn. They gave no reason for the recall. One of them said the research would be amended and reissued next week.

Reuters has a copy of the initial report.

Sberbank is headed by German Gref, a former Russian economy minister who casts himself as a moderniser with progressive views.

In the 64-page research report, dated October 2017, Sberbank’s division Sberbank CIB called on Rosneft to change its strategy “markedly” after the energy company incurred huge debts following an acquisition spree at home and abroad.

“Rosneft has been touting its top-down efficiency effort, complete with Stalinesque tales about employees being confronted with charges of malfeasance at management meetings and marched straight into police custody,” the initial report said.

Sberbank, in emailed comments referring to the report’s criticism of Rosneft’s efficiency, said: “This information is not in the current version of the research.”

The bank added that its report was meant only for investors and clients of Sberbank CIB.

Rosneft declined to comment.

The report’s authors, in a section titled “Rosneft: We Need to Talk About Igor”, also said Rosneft’s powerful Chief Executive Igor Sechin “almost single-handedly sets the company’s strategy”.

They calculated that since purchasing oil and gas producer TNK-BP for around $55 billion in 2013, Rosneft had spent a net $22 billion on acquisitions, “with no clear focus”.

“Assuming he remains in charge, the company will continue to pursue volume growth. In doing so, its heft will push it further out of Russia and perhaps further out of oil. This will only disappoint its shareholders,” the report said.

In the same report, Sberbank also questioned the wisdom of Rosneft working in Venezuela and expanding its gas business. (Reporting by Vladimir Soldatkin, Oksana Kobzeva and Olesya Astakhova; Editing by Andrew Osborn and Dale Hudson)

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