卡内基国际和平基金会-Rosneft-as-a-Mirror-of-Russias-Evolution_18页_67kb

Rosneft: A Summary of Its Evolution from 1991 to 2005

Core Content

Rosneft, originally established in 1991 as a replacement for the Soviet Ministry of the Oil Industry, has undergone a dramatic transformation over the past 15 years. Initially, it was a powerful state-owned entity responsible for managing state stakes in numerous oil enterprises, supporting R&D, and ensuring stable supply of oil and gas products. However, during the 1990s, it was significantly weakened by the privatization process, which was dominated by the rise of oligarchs and the inefficiencies of the transition period.

Main Points of the 1990s

1. Privatization and Loss of Assets

• Formation of Rosneft: Created in 1991 to replace the USSR Ministry of the Oil Industry, it was initially a major player in the Russian oil sector.
• Privatization Decree #1403 (1992): Established three vertically integrated oil companies (VICs) and Rosneft as a state entity.
• Loss of Subsidiaries: Rosneft lost key subsidiaries such as Noyabrskneftegas, Omsknefteorgsyntez, and others to private entities like Sibneft and SIDANCO.
• Purneftegas: The key oil producer of Rosneft, located in the Yamantau region, was a target of privatization battles, especially between V. Potanin and V. Chernomyrdin.
• Sakhalinmorneftegas (SMNG): A major subsidiary with offshore projects in Sakhalin, it had significant potential but was plagued by high production costs and reliance on state subsidies.

2. Privatization Battles and Failures

• SIDANCO and Purneftegas: SIDANCO, a VIC, sought to acquire Purneftegas, leading to a protracted legal battle.
• Berezovskiy's Influence: The privatization of Rosneft was influenced by the political clout of Boris Berezovskiy.
• 1997 Privatization Attempt: The privatization plan was delayed and eventually abandoned due to internal and external pressures, including the political instability of 1998.
• Alliance Group and Crisis Management: Ziya Bazhayev's Alliance Group was hired to restructure Rosneft, but the process was interrupted by the political upheaval of August 1998.

3. Weakness and Inefficiency

• Low Efficiency: Rosneft was often criticized for its inefficiency, with high lifting costs and poor financial performance.
• Employee Age: In 1997, the average age of Rosneft employees was 56, indicating a lack of modernization and innovation.
• Downstream Failures: Rosneft struggled in refining and retail sectors, losing key assets like the Moscow refinery to the Central Fuel Company.

Key Turnaround in the 2000s

1. Post-1998 Reorganization

• Appointment of Sergei Bogdanchikov: In 1998, Bogdanchikov was appointed as Rosneft's new president, marking a significant shift in leadership.
• Political Support: With the rise of Vladimir Putin, Rosneft was positioned as a counterbalance to private oil companies and oligarchs.

2. Strategic Expansion and Consolidation

• Arctic Shelf Projects: Rosneft formed a joint venture (Sevmorneftegas) with Gazprom and Surgutneftegas to develop northern oil fields, but later sold its stake to Gazprom.
• Sakhalin Offshore Projects: Rosneft and TNK gained control of Sakhalin-4 and Sakhalin-5, consolidating their position in the "second wave" of offshore projects.
• East Siberian Exploration: Rosneft acquired licenses for geological exploration in East Siberia and bought a stake in Verkhnechonskneftegas.
• Downstream Recovery: Rosneft began upgrading its refineries and re-entering the fuel retail market in Moscow.

3. Diversification Attempts

• Coal Industry: Rosneft attempted to diversify into coal by acquiring a stake in the Sakhalin Boshnakovsk Coal Mine and forming a joint venture with Mezhprombank, but later withdrew from the venture.

Conclusion

Rosneft's journey from a powerful state entity to a weakened private company and back to a strategic state player reflects the broader evolution of Russia's oil industry. The 1990s were marked by state asset losses and privatization struggles, while the early 2000s saw a resurgence under Putin's administration. Despite these changes, Rosneft continued to face challenges in efficiency and market competitiveness, especially compared to its private counterparts.