Siberian oil firm Irkutsk aims to stay independent
Russia's Irkutsk Oil Company is ready to resist any take-over attempts by its deal-hungry bigger rivals, believing its small size helps it to manage its far-flung fields in east Siberia, a senior company official told Reuters. "The company plans to stay independent. Independence is first of all an ability to make operational decisions quickly," said Yury Rubin, Irkutsk's deputy director general.
Copyright Reuters, 2014
Russia's state-owned Rosneft became the world's biggest listed oil producer last year when it acquired Anglo-Russian oil firm TNK-BP for $55 billion. The company, headed by Igor Sechin, a long-standing ally of Russian President Vladimir Putin, has made several more acquisitions since then and is likely to continue increasing its asset base through purchases. Russia's second-largest oil producer, Lukoil, has also been looking for upstream assets in Russia.
Irkutsk could be an attractive target because its business has been boosted by the construction of an Asian pipeline. The firm, which produces 60,000 barrels of oil per day, plans to increase output by almost 14 percent this year, Rubin said, helped by tax breaks it enjoys at its remote fields, which include the flagship Yaraktinskoye deposit in east Siberia.
The Russian government has introduced tax breaks in a bid to at least maintain the country's production at no less than 10 million barrels per day, the world's largest. Irkutsk aims to boost output to over 70,000 barrels per day in 2015. The European Bank for Reconstruction and Development and Goldman Sachs own roughly 4 percent each of Irkutsk Oil. The rest is owned by the management. Almost 70 percent of Irkutsk's output is exported to Asia via the East Siberia-Pacific Ocean pipeline, launched in 2010, with the rest sold on the domestic market. Rubin expects demand for its oil to remain high in Asia. "The East Siberian oil is of a high quality ... The premium for the oil will remain if the Asian market continues to grow," he said.