How Igor Sechin fell out with Vagit Alekperov

The Rosneft-owned company, Bashneft, accuses Lukoil of overestimating the tariffs for transshipment of oil through its Varandey terminal.
11.10.2018
Forbes
Origin source
 The dispute began after Rosneft bought a controlling stake in Bashneft and became Lukoil's partner in the joint venture Bashneft-Polyus.

In relations between Rosneft and Lukoil, another dashing turn. A Rosneft-owned company, Bashneft, accused Lukoil of overestimating the tariffs for oil transshipment through the Varandey terminal, which is the property of Vagit Alekperov’s company. In response, Alekperov announced that Rosneft was reducing investments in the project for the development of the Trebs and Titov fields. The dispute from absentee will go to full-time on October 22, when the Federal Antimonopoly Service will consider the complaint of Rosneft.

On the one hand, the tariffs for transshipment in Varandey are indeed significantly higher than the cost of port services in the Baltic, which seems to allow Rosneft to go to the FAS. However, there are too many “buts” in this story that catch the eye. And it's not just the technical complexity of the northernmost Russian oil terminal, which is what Lukoil explains the higher tariffs. Let's start with the fact that recently the tariffs on Varandey did not grow, but fell. Lukoil met Rosneft, but this was not enough for it.

“Lukoil” publicly suggests finding a reasonable pricing model, say, tying the tariff to the cost of production at the Trebs and Titov deposits. In response, through the media, Rosneft’s proposal to make Bashneft-Polyus (the operator of Trebs and Titov) a profit center. In other words, Lukoil should give its asset under the management of the company, where it has only a minority stake, and wait for the majority shareholder to start imposing tariffs for himself.

Interestingly, when Bashneft belonged to Sistema, there was no dispute over tariffs with the company with Lukoil. The parties agreed without the involvement of state arbitrators. It began to litter with the change of shareholders. Moreover, Bashneft is not the first to express discontent. It is easy to conclude that the conflict is connected precisely with the corporate corporate style of Rosneft, which always and everywhere strictly pursues its own interests, which others have to pay for.

Which, by the way, can be seen in the history of Varandey. Rosneft has already offered to get rid of Lukoil in transshipment. There was the option of building a pipe from Varandey to the port of "Indiga" on the Barents Sea. It would seem that here is the solution: if you don’t like the Lukoil tariff, you are building an alternative. But the trick is that, according to Rosneft, this pipeline was supposed to be built by Transneft, taking money from the general tariff for pumping oil. In other words, everyone had to dump to the construction of the pipe, which would have been used by Bashneft - the Rosneft subsidiary.

Or another similar case. Rosneft sells oil to China, and part of the supply goes through Kazakhstan. In reality, this is a swap, and the Kazakhs do not transit Russian oil, but sell their own, using Russian oil for their own domestic needs. The trick is that the quality of Kazakh oil is higher, and they began to demand additional payments. As a result, the FAS lowered the tariff for pumping oil in the Russian sector, and Kazakhstan sharply raised the tariff in its own way. Rosneft retained the total payment for transit - but Transneft had to pay for it. Here, in contrast to Indiga, it was not possible to fend off monopoly.

Or recall the bustling history of obtaining fiscal benefits for the Samotlor field. The Cabinet of Ministers did not clearly explain why only Rosneft received the benefit. Other companies also have flooded fields, they were also willing to use the benefits obtained to increase investment, among them was a state-owned company (if state property was the formal criterion).

Or a completely fresh story about the same taxes - the press writes that Rosneft was unhappy with the outcome of the meeting with the prime minister on the problems of the oil industry, as a result of which the event protocol could not be signed for several weeks. The central theme was subsidies to refineries from the state to curb fuel prices in the domestic market. Rosneft considered that its interests were not fully considered.

In a dispute over Varandey, Rosneft believes that it has become a victim of Lukoil’s use of its monopoly position. But quite recently the story surfaced that a number of Rosneft mining companies offered contractors - service companies - to postpone the payment term under contracts from the end of 2018 to the beginning of the next. And this is not the first such story. Rosneft is the largest customer in the service market. And this approach is very similar to the use of its dominant position. But FAS is not in a hurry to deal with this issue.

The list of examples can be continued. The main conclusion is that in the state regulation of the industry it is still necessary to proceed from the equality of approaches to all players. The “all are equal, but more equal” style inevitably provokes intercorporate conflicts. Targeted benefits, concessions, personal approaches - all of this does not help the industry at risk of losing the former good production dynamics.

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