Russia's state-backed energy firms have barely finished swallowing YUKOS but officials already seem to be cooking up other juicy takeover targets in Russia's energy sector, analysts said on Tuesday.
The state-controlled giants, Rosneft and Gazprom have already snapped up the bulk of former market leader YUKOS in a series of bankruptcy auctions this year, boosting the Kremlin's control over Russian energy.
Market participants, convinced the nationalizing trend has further to run before Russians elect a successor to President Vladimir Putin next March, saw three potential state powerplays developing on Tuesday.
First, prosecutors brought charges against Mikhail Gutseriyev, the president and main owner of Russneft, a mid-sized oil producer that appeared to spring up from almost nothing to become a top 10 player in the space of three years.
The state environmental watchdog, widely seen as a tool used to gain leverage over foreign firms, then opened up a second front by launching an investigation into Urals Energy.
And third, Russia's Natural Resources Minister Yuri Trutnev said he was counting on stripping the operating license from a huge Siberian gas field, Kovykta, which is majority held by TNK-BP, a joint venture of British oil major BP Plc.
Other firms are also thought to be on the Kremlin's shopping list, not least TNK-BP itself and Imperial Energy which also bears the teethmarks of the environmental watchdog.
"The actions we're seeing around Russneft, TNK-BP's Kovykta and companies like Imperial Energy -- these are all signals that consolidation in the sector is continuing," said Steven Dashevsky, chief analyst at Aton Capital in Moscow.
"It was largely predicted that after the state finishes one process (of breaking up YUKOS) a series of others will begin as there are a number of attractive public and non-public companies. State-controlled companies will continue playing a key role in consolidation of the sector."
HALFWAY THERE
Prosecutors have charged Gutseriyev with "illegal activities committed by an organized group on a grand scale", the interior ministry said.
The investigation began in January and Gutseriyev has repeatedly denied any wrongdoing. He was unavailable for comment on Tuesday, but Interfax news agency quoted him as saying the information concerning the charges was wrong.
Oleg Maximov, energy analyst at Troika Dialog, said theories about his indictment included that he was being put under pressure to sell the firm or punished for political activities.
"Be that as it may, Russneft seems to be an acquisition target, thus boosting the possibility that state control over oil production in Russia will exceed 50 percent already in the near term," Maximov said.
London-listed Urals Energy, headed by Leonid Dyachenko, the former son-in-law of the late Russian President Boris Yeltsin, is a far smaller firm and faces much vaguer claims, suspected of causing an oil spill and other environmental violations.
But the news of a probe into its affairs by the state watchdog was enough to alarm investors and knock 15 percent off its share price, which later recovered most of the lost ground.
The watchdog's deputy head Oleg Mitvol mounted a campaign of accusations last year against the Sakhalin-2 project, threatening then project leader Royal Dutch Shell with administrative sanctions and license withdrawals.
But his investigations dried up after Shell and its partners agreed to sell control to Gazprom, for what analysts said was a knock-down price.
Shell's rival BP remains the most successful foreign investor in Russia, but many analysts think the conspicuous success and unusual structure of its TNK-BP joint venture -- the only big energy project without majority Russian control or state involvement -- make it a near-certain target.
Although only part of TNK-BP's portfolio, Kovykta is still a world-class huge gas field, containing enough gas to supply the planet for the best part of a year.
That makes it a tempting prize for Gazprom, which has refused to allow the field to export gas to China, forcing it to supply the far smaller local market. Officials now cite low production as the reason to remove its license. The firm seemed to have won a reprieve by persuading a court to hear its demand to have its license terms clarified.
But Resources Minister Yuri Trutnev, asked on Tuesday if he still expected the license to be revoked, "I think so, yes. They are not fulfilling their license agreement."
(Reuters, 15/05/2007)