Russian oil companies seek new markets and easy money
Russian oil companies are actively expanding their presence on the global markets, America’s Wall Street Journal reports. The newspaper experts are sure that the Western Europe market attracts Russian oil producers with the increasing cash amount and increasing international ambitions.
Surgutneftegas, Russia’s third largest oil producer, currently negotiates purchase of the network of German filling stations and a part of German oil refining capacities belonging to British Petroleum. At the same time, another Russian oil company, Yukos is negotiating purchase of oil refining capacities in Italy with the Italian company Eni. However, they way to success on the global markets is not that easy for Russian oil producers. Wall Street Journal informs that despite good production facilities and large oil and gas reserves, only some of the Russian oil producers would be able to enter markets outside the Eastern Europe bounds. Experts say that low capitalization of Russian oil companies is explained with their insignificant presence on the global markets. For instance, Russia’s Yukos and America’s ChevronTexaco own comparable oil and natural gas reserves, however, the market capitalization of the Russian company makes up only 20 billion dollar, when that of ChevronTexaco is 72 billion dollars.
There are more reasons explaining the low success of Russian oil companies. Analysts say that cash receipt is rather great in these companies. However, being apprehensive of considerable fluctuation of oil prices, Russian oil producers actively diversify their sources of income: they are more actively and actively trying to turn from carbohydrates production to carbohydrates processing. This is proved by the fact that many of the Russian companies wish to purchase processing capacities at any price in order to obtain an opportunity to make retail sales abroad independently.
But some experts doubt that processing capacities of the Eastern Europe are a good opportunity for Russians. It is generally believed that Russians won’t increase their income at the expense of European assets. This is explained with the fact that European processing enterprises are on a highly competitive markets and show little profit
The speedily increasing oil production in the country makes Russian oil companies seek new markets. Russians have already bought several oil refineries and filling stations in the Baltic countries, Romania, Bulgaria, Hungary and Ukraine. Some of the companies even plan to go outside the European boundary.
However, despite the instant failures, Russian oil companies aren’t going to stop the expansion to the “civilized” world. According to Wall Street Journal, Yukos plans to exchange part of its oil reserves on a share in the off-shore oil projects. The company is actively looking for potential investors in the West for purchase of oil reserves in Iraq, if it will be possible. Meanwhile, LUKOIL already owns filling stations in the eastern part of the USA and the controlling interest in a large Iraqi oil field; the company plans to use the field as soon as the UN sanctions are abolished. And certainly if it will be able to do it when the sanctions are abolished.
Ahtyam Ahtyrov PRAVDA.Ru
Translated by Maria Gousseva
Read the original in Russian: http://economics.pravda.ru/economics/2002/7/21/64/3045_RussianOil.html
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