Bazovy Element and Oil India to Clash for Udmurtneft
United Oil Group, a part of the Bazovy Element holding, placed an early bid to buy Udmurtneft from TNK-BP. Oleg Deripaska’s company is willing to get the producing company at any price and ready to outbid anyone, a source informed of the sale told Kommersant. Therefore, Russneft and Sibneft may soon drop out of the tender. TNK-BP will probably have to choose among three rivals: United Energy Group, Itera with India’s ONGC and North-Western Oil Group with Oil India.
Udmurtneft develops 23 fields in Russia’s internal republic of Udmurtia accounting for 60 percent of the oil production in the region. The firm extracts some 6 million metric tons of oil annually. Experts put the company’s price at $1.5-$2.5 billion.
TNK-BP has considered early bids for the asset and informed the bidders about their standing and chances in the further competition. Having received this notification, Russneft withdrew from the tender claiming that the price for Udmurtneft was already 30-35 percent higher than its actual value, the source of Kommersant reported.
Sibneft’s management is also mulling over the bidding for Udmurtneft. The decision has not been made yet, a representative of Sibneft told Kommersant. Itera, which set up a consortium with Indian ONGC, has not made up its mind either though it has submitted a bid, says a source in the company.Only the consortium of North-Western Oil Group and Oil India firmly declared their intention to run in the competition. “We have submitted the bid for Udmurtneft with an open price. Our Indian partners who are taking the expenses on themselves are ready to pay between $15 and $20 million more than any other bidder” said Ernest Malyshev, the president of North-Western Oil Group.
Udmurtneft has become overpriced because of United Oil Group, according to the source of Kommersant. Bazovy Element’s subsidiary tries to win the tender no matter what in an effort to provide the Afipsky Refinery, BazEl’s main oil asset, with raw materials seeing no other tenders for Russian major oil producing assets on the horizon.
by Anna Skornyakova, Dmitry Belikov
www.kommersant.com/page.asp?idr=500&id=653688
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