Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Novatek Sees No Impact of Sanctions on Billionaire Timchenko

March 28 (Bloomberg) -- OAO Novatek won’t be affected by recent U.S. sanctions on billionaire Gennady Timchenko, who owns 23.5% of Russia’s second-largest gas producer, co-owner and Chief Executive Officer Leonid Mikhelson said.

The market has overreacted to press reports on the subject, and a decline in the shares is temporary, Mikhelson told reporters in South Korea this week. The stock fell as much as 13 percent the day after the U.S. acted against Timchenko and remains 3 percent below its level before the announcement. It was up 2.2 percent to 349.03 rubles at 2:56 p.m. in Moscow.

Novatek also doesn’t see any potential impact on the $27 billion Yamal LNG project, Mikhelson said.

France’s Total SA, which first bought Novatek shares three years ago and now holds about 17 percent, has an option to increase its stake to 19.4 percent, though there’s no deadline for doing this, Mikhelson said. The “mechanism” for doing so would change from April, he said without elaborating.

While Novatek plans to continue its share buyback program, the timing and volume depends on markets. “We don’t want to reduce the liquidity of our shares on the market,” he said.

Novatek, Total and China National Petroleum Corp. are developing the Yamal liquefied natural gas project in Russia’s Arctic. Most of the infrastructure required to build the gas-export plant is now in place and the group is talking to a range of lenders including Chinese banks and export-credit agencies to finance construction, he said.

More Contracts

Yamal LNG has concluded contracts for about 78 percent of planned gas production and agreements on the remaining 3.5 million tons will be signed soon, Mikhelson said, adding that he doesn’t expect tension with larger rival OAO Gazprom, which is also chasing LNG sales.

“Gazprom is our shareholder,” he said. “We take into account Gazprom’s plans and schedules.”

Yamal’s fuel is competitive because the field under development is quite similar to existing Novatek deposits in the same Yamal-Nenets Region, where net production costs stand at about 56 cents a barrel of oil equivalent.

“This is our primary advantage,” Mikhelson said.“Our gas will fill a good niche in any market, not only the Asian one.”

To contact the reporter on this story: Will Kennedy in London at wkennedy3@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Alex Devine, Scott Rose

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.