By Megan Murphy in London
Published: February 22 2010 02:00 | Last updated: February 22 2010 02:00
Renaissance Capital, the Russian investment bank that nearly collapsed during the financial crisis, is launching an operation in Johannesburg as it looks to exploit a pan-African franchise to build one of the world's leading emerging markets banks.
RenCap is due to announce today that it has hired Clifford Sacks, a former senior banker at Merrill Lynch, to head its South African office as it continues to expand amid the nascent economic recovery.
The outpost will focus on four key industries - metals and mining, oil and gas, financials and telecoms -
It is intended to serve as a conduit for South Africa-based companies looking to invest in other parts of sub-Saharan Africa, where RenCap already has a strong presence.
Andy Lowe, chief executive of RenCap's African business said: "Our goal is not to be all things to all people.
"The focus on these four industries builds on our existing emerging markets platform in these sectors across research, sales and trading, capital markets and mergers and acquisitions. They are also where we see the strongest demand from clients."
The Johannesburg office is part of RenCap's ambitious strategy to rebrand itself as a leading force in emerging markets in the aftermath of the crisis, when the bank had to sell a 50 per cent stake to Mikhail Prokhorov, the Russian billionaire, as well as to slash 40 per cent of its workforce.
Stephen Jennings, the former Credit Suisse banker who set up RenCap in 1995 and who is known in Russia as the "Kiwi oligarch", has recently returned as chief executive to spearhead the group's expansion.
RenCap intends to hire more than 200 people this year, taking its headcount closer to pre-crisis levels.
In South Africa, the bank expects to build a team of about 25 under Mr Sacks.
Following the $2.2bn float by UC Rusal, the Russian aluminium group, in Hong Kong last month, RenCap - a joint bookrunner on the Rusal deal - is expected to do well should other Russian companies look to Asia to list.
The bank is more keen, however, to emphasise its business in places such as Nigeria, Kenya, Zimbabwe, Ghana and Zambia, where it expects to eventually have as many as 600 bankers.
Andrew Cornthwaite, deputy chief executive and head of investment banking, told the Financial Times that the bank's 2010 deal pipeline included 17 initial public offerings in nine different countries.
Activity in the Oil and Gas sector (including regulatory)
Itar-Tass: Energy minister calls for creation of national hydrocarbon monitoring system
MOSCOW, February 20 (Itar-Tass) -- Energy Minister Sergei Shmatko called for creating a national system that would monitor the movement of hydrocarbons in the country.
“Russia needs to create a unified state information system that will use modern means for monitoring the movement of hydrocarbons on all of the transport routs in the country,” he said on Saturday.
“In the past, only Transneft had a system of export schedules. Now we are considering the possibility of having a unified information system in order to get data on the movement of hydrocarbons by all means of transportation,” the minister said.
Shmatko said he was not ready to say that the system would be used for manual management of oil and petrol product flows. “The main task is to obtain exhaustive information in the country where almost half of he budget is generated by oil and petrol products: where the oil goes, how it is used, how effectively it is used, and where petrol products go,” he said.
Bloomberg: Russia May Detail East Siberia Oil Tax Break, Shmatko Says
February 20, 2010, 04:20 AM EST
By Anna Shiryaevskaya
Feb. 20 (Bloomberg) -- Russia may seek to specify exemptions on East Siberian oil exports depending on fields, while keeping the tax break as a “long-term measure” to stimulate investments, Energy Minister Sergei Shmatko said.
“We will work out more detailed instruments as part of the long-term policy,” Shmatko told reporters in Moscow yesterday. “Maybe we will assess the potential of every field, or evaluate the need to attract temporary measures such as setting up certain coefficients.”
Russian oil producers, such as OAO Rosneft and TNK-BP, have called for tax breaks as an incentive to develop remote, expensive resources in the Arctic and eastern Siberia. The energy officials, including Deputy Prime Minister Igor Sechin, supported the move. The Finance Ministry has criticized the zero-percent duty for eating into budget revenue after Russia’s first deficit in a decade last year and called for revision.
“If there is no incentive, there is no crude produced,” Shmatko said yesterday. The long-term policy to stimulate investments in the new region is aimed at applying exemptions on exports of crude from the new producing region, he said.
The finance and energy ministries are “closer” to agreeing on the fate of the tax break, and a decision will probably be made in March, Deputy Finance Minister Sergei Shatalov said in an interview on Feb. 17. The export duty exemptions for eastern Siberian fields will be kept through March, he said.
The government has yet to decide for how long the duties should apply, with Shmatko previously calling for tax breaks of as long as seven years for the fields.
“These export duties should be applied for the period of intensive development of the fields to create economic conditions for crude production,” Shmatko said yesterday.
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UpstreamOnline: Lukoil misses full reserve replacement
Russia's second biggest oil company Lukoil replaced 95% of its 2009 production with new reserves, trailing behind its top rival Rosneft.
Upstream staff 19 February 2010 15:13 GMT
Analysts closely watch reserves replacement ratio as a sign the company can grow production in the future and maintain output year to year.
Lukoil, 20% owned by ConocoPhillips, said today its proved reserves rose by 782 million barrels of oil equivalent due to geological exploration, production drilling and acquisitions in 2009, slightly below the amount it produced, reported Reuters.
Its total stood at 17.5 billion barrels of oil equivalent by the end of last year, including 13.7 billion barrels of oil and 22.9 trillion cubic feet of gas.
The figure could have been 1.8 billion barrels of oil equivalent higher if Lukoil was not forced to transfer them from the category of proved reserves into lower categories citing new stricter rules by US Security and Exchange Commission.
"The company expects that these volumes will be returned into the proved reserves category as their development start date draws nearer or some new technologies are applied," it said.
Rosneft said earlier this month it had increased its reserves by 2.5% last year, or 163% by different reporting standards, maintaining its position as the biggest of the world's publicly traded oil companies.
Lukoil shares were up 1.1% by 1440 GMT, in line with the broader MICEX's oil and gas index.
Published: 19 February 2010 15:13 GMT | Last updated: 19 February 2010 15:13 GMT
New Europe: BP, Rosneft give up on East Schmidt in Sakhalin-5
21 February 2010 - Issue : 874
UK oil major BP and its Russian partner Rosneft have given up the license for the East Shmidt Block, in the Sakhalin-5 development area, news agencies reported.
After conducting more than 4,400 kilometers of seismic study, the two companies concluded at the end of 2009 that further exploration at the block wasn’t economically justified, Rosneft and BP said. “Based on collected data and analysis, the decision was taken not to proceed with exploration and to relinquish the East Shmidt license,” a BP spokesman said. The East-Schmidt block, with a total area of 9,400-square kilometers, is located on the north-eastern part of Sakhalin shelf in the Okhotsk Sea, to the North of Schmidt Peninsula.
The two companies gave up a license for the West Shmidt block, which is part of the Sakhalin-4 development project, when it expired in November 2008.
BP and Rosneft are still exploring the Kaigansky-Vasuykansky blocks off Sakhalin Island. Several discoveries have been made at that block, BP said, and in 2010 the companies plan to analyze seismic data collected last year in preparation for future drilling. The Kaigansko-Vasyukansky block, with a total area of 7,200-square kilometers, is located in the northeastern part of Sakhalin shelf. The sea depth in this area varies from 90 to 120 meters. To date, 13 prospective structures have been revealed within the block.
In 2004, the first exploration well was drilled, which revealed the Pela Leich reservoir, according to information posted on the Rosneft website. In 2005, the Udachnaya exploration well was drilled, which also revealed a prospective reservoir. The obtained data confirmed high hydrocarbon potential of the Kaigansko-Vasyukansky block. In 2006, exploration wells were drilled at the South-Vasyukanskaya and Savitskaya structures.
In March 2007, a discovery certificate to the Kaigansko-Vasyukanskoye-Sea field was received. The field’s recoverable ABC1 reserves amount to 16.14 million tonnes of crude oil and gas condensate. In 2008 2,100 linear km of 2D seismic shooting were carried out in the western part of the Kaigansko-Vasyukansky block. The license for the block was extended until 2013 with amendments to the license agreement.