Rosneft wants to purchase 20 percent stake in Novorossiisk Sea Port

Reuters reports that one of world’s largest listed oil company Russian firms, Rosneft, has asked President Vladimir Putin to sell the state’s 20 percent stake in Novorossiisk Commercial Sea Port  (NCSP) to Rosneft.

The state plans to sell its 20 percent stake in NCSP by the end of this year as a part of a wider privatization drive.

State pipeline monopoly Transneft and private investment group Summa Group jointly own 50.1 percent of NCSP, which operates the ports of Novorossiisk and Primorsk which account for more than half of crude exports from Russia. Stakes in Rosneft and state pipeline monopoly Transneft (TRNF_p.MM) were initially meant to be sold through the program but they both opposed sales on the open market.

Transneft and private investment group Summa Group jointly own 50.1 percent of NCSP, which operates the port of Novorossiisk and Primorsk on the Baltic Sea. Both companies have been also at odds over the control of NCSP, Russia’s biggest crude export operator.

Transneft (which together with Summa acquired the stake in NCSP in 2010) has been seeking tighter control over oil flows, the lifeblood of the country’s $2.1 trillion economy.

Rosneft’s entry may threaten Novorossiysk’s shift away from oil, hurting its share price, said Andrey Rozhkov, a Moscow- based transportation analyst at IFC Metropol. Crude accounts for about 70 percent of cargo volume and less than 30 percent of revenue, according to company statements

Earlier this month, Transneft bought 10 percent interest in  NCSP, moving to increase its stake as it battles Summa Group for control of the company.

Novorossiisk and Primorsk together account for more than half of crude exports from Russia, the world’s top oil producer, which pumps an average of 10.5 million barrels per day.

The rest of NCSP shares are held by minority shareholders, including companies linked to Russian Railways with 5.3 percent stake, or are in free float.

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