The following transactions have been approved: the acquisition by Indian ONGC Videsh Limited Company of 15 percent of the shares in Vankorneft; the acquisition by Swiss Molumin AG Company of 75 percent of the shares in Geotechnology.
Dmitry Medvedev’s opening remarks
by Igor Artemyev
From Dmitry Medvedev’s opening remarks:
Meeting of the Government Commission on Monitoring Foreign Investment
Despite the sanctions and the difficulties of business transactions, we
are determined to develop investment cooperation. Our economy remains open. Now
that the political situation is effectively dictating its terms to foreign
business, we are especially attentive and respectful with regard to the foreign
companies that continue to work in our country or are coming to our country
with investment. We are willing to provide a comfortable environment for them
to incentivise them to implement large projects in Russia.
The Government should continue to pursue a very thorough approach when considering
applications from foreign companies that are willing to invest in Russian
This economic interaction
is beneficial for all parties. As a result, Russian companies get the essential
financial resources, modern technology, newest managerial solutions and
innovative products while our foreign colleagues strengthen their positions in the
A case in point is our
extensive ties with India in various areas – from the nuclear energy industry
and telecommunications to cooperation in the defence and technology sector.
Today we are considering an application from ONGC Videsh Limited, India’s
second largest oil and gas company, for the acquisition of stock in Russia’s
Vankorneft company, a crude oil and associated gas producer.
The Vankor oil and gas
condensate deposit is the largest field discovered and put into operation over
the past 25 years. If an affirmative decision is taken, the presence of Indian
companies in our economy will expand and the portfolio on ONGC and Vankorneft
oil assets in hydrocarbon exploration and production will grow.
Excerpts from the transcript:
Igor Artemyev: The commission stated that, since the start of
2016, we had received 11 lucrative applications for transactions involving
control over Russia’s strategic assets. We have received applications from
companies in Japan, the United States, Norway, and Cyprus. They are about
buying service providers operating at Russian ports, pharmaceutical companies,
and businesses engaged in the manufacturing of equipment for nuclear power
plants, printing and subsurface use equipment.
Since January 1, we have seen an increase in
the number of applications concerning Russia’s strategic assets filed by
foreign investors from different countries.
The acquisition by the Indian state-owned ONGC
oil company of a 15-percent interest in Vankorneft – Russia’s major subsurface
user – is a major transaction that is strategically important for Russia. Vankorneft
is a 100-percent subsidiary of Rosneft, and Vankor is the largest oil and gas
field discovered in Russia in the past 25 years.
Plans are in place to produce about 500
million tonnes of oil and about 182 billion cubic metres of gas jointly by the
Russian and Indian sides at this field alone.
The Indian side will pay about $1.3 billion
for Vankorneft shares. Rosneft’s senior executives have recently signed a
preliminary agreement with the Indian side for it to buy an additional stake in
Vankorneft that covers other oil and gas fields operated by this company.
The commission was in favour of this
transaction and, as the Government of India also approved it, the transaction
will be executed in the near future.
The second transaction involves another Russia’s
strategically important company – Geotechnology – which is based in
Petropavlovsk-Kamchatsky. This company owns licences covering several deposits
that boast large quantities of nickel, copper and cobalt, and also gold,
platinum and palladium. It is Russia’s second-largest nickel deposit, and is
operated by Geotechnology. The Swiss Molumin AG intends to acquire 100 percent,
respectively, of the company named AMP, which, in turn, owns and plans to sell 75 percent of
Geotechnology. The commission approved this transaction as well.
Another 11 transactions from the same areas of
business will be submitted for approval by the commission soon.
We are already working on about 15 such
transactions. Even in quieter times, we used to receive fewer than 15 transactions
per quarter. Investors who before stayed on the sidelines amid political and
economic uncertainty began to take important decisions and to approach the
commission in the first quarter of 2016. They are willing to invest their money
in Russia’s strategic assets, which is a good sign.
Today, we reviewed a transaction worth
billions of dollars. The Yamal deal is also worth billions of dollars.
Additional Indian transactions are also measured in billions of dollars. They
all concern developing entire regions and huge agglomerations. They’ll have an
enormous multiplication effect. Over time, these deposits and transactions may
become the flagships of the Russian economy.