Hand-notes of a briefing given by Igor Artemiev after a meeting of the Government Commission for Control over Foreign Investments

Igor Artemiev: Today the Government Commission for Control over Foreign Investments in the Russian economy chaired by Dmitry Medvedev, the Head of the Government, approved a deal for buying 11% shares of Russian oil company “Rosneft” by a group of Indian companies that are controlled by the Indian Government.

The Government Commission already approved two such transactions: on buying 23.9% of the Vankor field and 15% of the Vankor field. I’d like to emphasize that this is about buying shares of “Vankorneft” shareholding company (a subsidiary of “Rosneft” NK” PJSC) rather than “Rosneft” itself.  Vankor is the largest oil and gas field in the Russian Federation.

Cumulatively all Indian companies are getting control over 49% of “Vankorneft” shareholding-company while “Rosneft” keeps the controlling interest. It means that “Rosneft” does not lose a possibility to exercise management through the controlling interest in its subsidiary.

As a result of the third – last - transaction for buying 11% shares, the Indian companies are prepared to pay around 1 billion dollars.

Question: FAS is going to approve “Rosneft” purchasing “Bashneft”? Does not it violate the antimonopoly law?

Igor Artemiev: I can state right away that it does not violate the antimonopoly law. We shall certainly put the relevant additional requirements to “Rosneft”; that is, we will adjust our determinations that were issued earlier, for instance, purchasing “TNK-BP”.

The share of “Rosneft” on Russian market for most types of oil products will not exceed the statutory threshold - 50%, it will be higher than 35%. The companies already have the dominant position and fall under the supervision of the antimonopoly body but only for one or two elements (we are currently conducting a relevant market analysis) that can cross the threshold and it will generate the need to adjust our determinations. We will be doing it in cooperation with “Rosneft”, since such cooperation has been ongoing in the recent years and is very constructive.

So there is no question about violating the antimonopoly law.

Question: Will FAS issue determinations to sell some refueling stations?

Igor Artemiev: As usually we will study markets, including, regional markets. In particular, in relations to purchasing “Bashneft”, these are the markets of Bashkiria, Tatarstan and other regions in Russia where “Bashneft” delivered. If FAS sees a significant growth of economic concentration on such markets we shall issue structural determinations on selling some petrol-filling stations to pass hands, as we did it for purchasing “ТNK-BP”. “Rosneft” has been fulfilling its obligations in good faith. They sold some of its petrol-filling stations, some of them they were not able to sell due to poor market trends, but the company will try again, it will be done.

On 13 October 2016, the Government Commission for Control over Foreign Investments preliminary approved a transaction for “ONGC Videsh Vankorneft Pte. Ltd.” (Singapore) and “ONGC Videsh Limited” (India), members of the same group of persons, acquiring the right to have control over 11% voting votes of the authorized capital of “Vankorneft” shareholding company (the Russian Federation).

The preliminary approval of the transaction is valid for 36 months.

At the end of the meeting the Head of the Federal Antimonopoly Service, Igor Artemiev, and Chief Executive Officer, the Board Chairman of “Rosneft” NK” PJSC, Igor Sechin, gave briefings.