MOSCOW (Reuters) - Russia’s No.4 oil firm Surgutneftegas (SNGS.MM), whose shares have spiked on acquisition rumors, is poised for a takeover, most likely by the state, a prominent financier told the Reuters Russia Investment Summit on Monday.
“Something has to happen around Surgut ... There is probably a fit with Gazprom (GAZP.MM). Or with Rosneft (ROSN.MM), although it creates a too big ... company,” said Boris Jordan, president and CEO of private equity and advisory firm Sputnik Group Ltd.
Shares of Surgut have risen since early August on rumors the Kremlin is considering creating a new state oil major by wrapping into it assets of state-controlled Rosneft, which is already Russia’s largest oil firm, Surgut and other firms.
Gazprom is the world’s largest gas producer, which has also big ambitions in the oil business.
The Kremlin has already increased the state’s direct share in the oil business to over 40 percent from just 10 percent five years ago and analysts expect this trend to continue, alongside growing resource nationalism in other energy-rich nations.
Analysts also say Surgut’s current owners may want to sell out and become minority shareholders in a big state-controlled energy company to hedge political risks after the March 2008 elections, when President Vladimir Putin has to step down.
Surgut’s owners are unknown although market analysts say the company is controlled by the Vladimir Bogdanov, its president and a close ally of Putin. Surgut’s shares were 0.4 percent up at 8:20 a.m. EDT, valuing the firm at $48 billion.
Jordan said he saw little chance of Surgut being taken over by a private firm such as LUKOIL (LKOH.MM).
From 2001 through January 2003, Jordan led a team of Sputnik Group professionals in orchestrating a management turnaround of Gazprom-Media, Russia’s largest media group encompassing the NTV national channel, the NTV Plus satellite pay-TV service and a number of other television, radio and publishing businesses.
“I can see three large Russian oil companies (in the long-term)” said Jordan, who added it was not a surprise that Russia has followed the path of Venezuela and other countries by increasing the degree of state involvement.
“Russia has done a pretty good job so far, much better than Venezuela. I’m not that concerned about the current level of ownership. Significantly increased, it could however create some macro difficulties,” said Jordan.
He said he considered it important to keep the ratio of private and state ownership in the sector at 50 percent, including because private firms are managed more efficiently.