Rosneft talking on Vnukovo fuelling
Rosneft is in talks with Vnukovo-Invest private shareholders to purchase 50% of the Vnukovo airport fuel complex.
Rosneft First Vice President Pavel Fyodorov told reporters that talks on a deal had been underway some time on deal estimated to be worth as much as $600 million. "Commercial talks are being held, and have been in progress for several months."Rosneft owns only one airport fuelling complex, in Ulan Bator, Mongolia, but plans to build another two in Russia, with ruvals Lukoil, TNK-BP and Gazprom Neft having far stronger market positions.Vnukovo-Invest owns 25% of Vnukovo Airport. Dmitry Adamidov, Head of the analysts at InvestCafe, says the move is to increase Rosneft’s turnover and leverage a stronger position in the fuel supply market. “It is very rare case when political objectives align with economic capabilities. On one hand a controlling stake in third major airport fuel complex provides with high sales margin and on the other hand allows state control of fuel supply.”Adamidov notes that the negotiations are stuck on price issues.“The only uncertainty is the cost of the stake which is to my mind has a significant premium to the market and the buyer will procrastinate until the price is acceptable” Anna Znatnova, analyst at Alemar also sees scope for Rosneft to have a bigger impact on the fuel supply market with the move.“Rosneft has weak market position compare to its rivals on this market: it provides fueling services only in the airport of the Mongolian capital Ulan-Bator. Rosneft can become the fuel supplier in Sheremetyevo airport where passenger turnover is higher than in Vnukovo for instance. Moreover, with tough pricing policy and oil price volatility FAS will look to keep the control on major oil consumers to maintain prices and ensure supply.”