The State Property Fund of Ukraine resolutely denied the allegations of some Russian media outlets about preparations for the privatization of the Kremenchuk Oil Refinery as part of Ukrtatnafta. “No privatization is planned,” declared SPF Deputy Chairman Serhiy Hlushko, who is also cochairman of the Ukrtatnafta board. Earlier, First Vice Premier Oleh Dubyna said the company would remain public property. Mr. Hlushko believes the allegations stem from a Russian company interested in purchasing the government block of shares.
Moscow media point to Russia’s Tatneft, Slavneft, Surgutneftegaz, and YUKOS as the principal contenders for the government interest. Mr. Hlushko stressed that none of these companies has negotiated privatization of the Kremenchuk facility and, for reasons best known to himself, placed special emphasis on the absence of any contact with YUKOS. The Kremenchuk Oil Refinery is the last of Ukraine’s four largest refineries controlled by the state. Previously, the one in Odesa was sold to Russia’s Lukoil; the one in Kherson to Kazakhoil, and the one in Lysychansk to Tiumen Oil.
In addition, the SPF regards as highly improper the Russian media’s estimated cost of the 43% state interest in Ukrtatnafta ($89 million), as, for example, the 18% interest evicted from Sigrup and AM RUZ Trading is valued by the SPF at $65 million (incidentally, nobody is sure what will happen to this interest).
The Ukrtatnafta 18% interest was taken from Sigrup and AM RUZ Trading because the bills paid for the stocks were found to have been improperly executed. The SPF received the court ruling a couple of weeks ago. Serhiy Hlushko says the company’s remaining stockholders will decide what to do with the block of shares (43% held by the SPF, 28% by its Tatarstan counterpart, and 8% by Tatneft. “First, the stocks are to be registered as belonging to Ukrtatnafta. After that the founders will have to be dealt with to buy out the interest, and finally the matter will be considered by the supervisory board,” Mr. Hlushko announced. The board meeting was scheduled for April 18, but has been postponed, presumably for two weeks, perhaps to allow time for stockholders’ consultations on the stocks that are currently somewhat in abeyance.
The SPF seems to have made up its mind and will offer the government buy part of the 18% interest in Ukrtatnafta, so the state block of shares could become the controlling interest (51%). To do so, the cabinet has to scrape up $30 million, an unplanned sum that will not make the Ministry of Finance happy. Serhiy Hlushko believes, however, that there is an actual opportunity to raise the money and even identifies the source: “The SPF has a non-statutory fund with items that can be used for such payments. One such item has it that the SPF can buy stocks required for the fulfillment of state tasks.” The state has not purchased a single block of private shares in the years of independence, so a precedent could be established.
Meanwhile, the SPF knows nothing about the Ukrtatnafta Tatar stockholders’ plans, just as it is anyone’s guess whether they will find $35 million to add to their interest. Serhiy Hlushko does not rule out the possibility that a part of or maybe the whole 18% interest will be sold to a third-party investor — perhaps YUKOS or Slavneft. The proceeds will be transferred to the Ukrtatnafta’s statutory fund for modernization. The deputy chairman of the supervisory board considers that the involvement of an outside investor is not likely to upset the company’s stable performance. “We have more oil supply offers than we can handle,” says Mr. Hlushko. In all likelihood, the Kremenchuk stocks are craved by those whose offers are not met on a priority basis, as evidenced by the leak about the possible sales of Ukrtatnafta’s state interest.
