Lukoil supports ESPO expansion, believes Transneft has resources for project
MOSCOW. Feb 20 (Interfax) - Lukoil supports the idea of expanding the Eastern Siberia - Pacific Ocean (ESPO) oil pipeline and believes that pipeline monopoly Transneft has sufficient resources to implement the project, the Russian oil company's vice president, Leonid Fedun said in a conference call.
Commenting on a proposal from Rosneft that Transneft issue new shares to the state oil major to help finance the ESPO expansion, Fedun said: "The initiative exists. But I believe that Transneft has sufficient financial resources in order to expand the ESPO. We support the expansion of the ESPO in every way, this is a premium segment."
Deputy Economic Development Minister and Federal Property Agency head Olga Dergunova said there are currently two constraints on reducing the state's stake in Transneft to less than 75% plus one share. The first is that such a decision must be made by presidential decree, she said.
"The second is the direct prohibition on state companies participating in the privatization of other state companies, so as not to promote the growth of the state sector. In this sense, the participation of Rosneft in a new share issue by Transneft will be hindered by these two constraints," Dergunova told reporters.
She said the government could propose to get around these constraints, but there would have to be substantial arguments for this because it would create a precedent "from which we have all been retreating since 2012."
Earlier at representative of Rosneft confirmed to Interfax that the company had submitted a number of proposals to the Russian government concerning a new share issue by Transneft to the state oil company, but he declined to provide details.
He said Rosneft's proposals have already resonated and "an active working discussion of this subject is underway at the Energy Ministry and several Russian oil companies have supported these proposals."
A source at Rosneft told Interfax that "a new share issue by Transneft is just one of the possible forms of oil production companies' participation in the program of building new branches of the pipeline system."
"This is a proposal for discussion. I stress that this is just a proposal. There is no goal to acquire equity and get preferences," he said.
A representative of Transneft called the proposal for the pipeline monopoly to issue new shares to Rosneft "hasty" and "regretful."