May 31 2010
Interview with Chairman of the Board of Directors of Antipinsky Oil Refinery Dmitry Mazurov
Six years ago Antipinsky Oil Refinery, member of the New Stream Group, was built in one of the largest oil and gas constituent subjects of Russia, the Tyumen Region. Already from this year on it will be able to meet the fuel demand of the entire region. Chairman of the Board of Directors of Antipinsky Oil Refinery and the New Stream co-owner Dmitry Mazurov told RBC Daily correspondent Galina Starinova about the prospects of the company development, its partners, and potential acquisition of new assets.
- Antipinsky Oil Refinery is quite a young enterprise. Dmitry Petrovich, will you say something about the plans of corporate development?
- The refinery was established in July 2004. The first workflow phase was commissioned already in 2006, the capacity amounted to 50 thousand tons p.a. Now we have put the second workflow phase into operation. It will allow us to increase the productivity up to 2.75 million tons and by the end of the year we plan to refine up to 4.1 million tons. All the units are ready to operate so. When the third-phase facilities have been commissioned, what is expected to take place in three years, the refinery will run at the capacity of about 7 million tons of oil per year, whereas the processing depth will swell from todayТs 60% to 94%.
- How much money have already been invested in the project and how much is still needed?
- As of today the amount of funds, including the operating capital, invested for the project to work has made up USD 500 million only. Plus UDS 2 billion needed for the construction of the third-phase facilities. Currently the company is negotiating this matter with different banks, including Raiffeisenbank..
- Under what conditions will you raise funds?
- Conditions will form depending on the financial market situation, it will be both, debt financing, bank lending, and using the resources of off-takers. These are two major international oil-trading companies, Glencore and Vitol, possessing considerable financial reserves. As of today export accounts for about 2/3 of the entire volume of oil products manufactured by the refinery. Meanwhile the equivalent of annual revenues from selling 4 tons of oil products makes up USD 2 billion p.a.
- Have you conducted negotiations with Gunvor?
- We are willing to cooperate with any company if its prices are no worse than those of our consumers. About one year ago I met the CEO of Gunvor Genady Timchenko. If he is interested to work with us and buy our products we are ready to consider proposals.
- Do you invest your own funds in the development of the refinery?
- The portion of our own funds amounted to some USD 100 million out of the entire invested sum.
- What products does the refinery offer?
- The products are as follows: technical gasoline, diesel fuel of three categories (D-0.2-62, winter and D-0.1), and residual oil M-40. After the commissioning of the second-phase facilities we began to produce more low-sulfur residual oil (up to 1%) for the bunkering of vessels and for export abroad, as well as D-0.1 diesel fuel. By 2013 plans are in place to build a diesel fuel hydrotreating unit with a dewaxing module which will make it possible to produce fuel complying with Euro-5 standard requirements, including winter and arctic diesel fuel. It will be in demand not only abroad, but also in the nearby regions of Russia where temperature are often below zero, for example, in the Khanty-Mansi and Yamal-Nenets areas.
- What are consumers of your oil products?
- Mainly it is the Urals Federal District, the Tyumen Region, of course, first and foremost. There was no such refinery in this region where huge resources of oil are concentrated and extensively extracted and light oil products were delivered from other oil refineries located in Omsk, Ufa, and Perm. Antipinsky Oil Refinery can meet fuel demand not only of the entire Tyumen Region. It can produce some 2 million tons p.a. for the Urals Federal District. Moreover, some of our products will be supplied to the Omsk Region, few will be shipped to the Eastern Siberia and other more distant areas of the country: the Leningrad, Arkhangelsk, and Kaliningrad Regions.
- Where do you buy oil?
- Our main suppliers are Surgutneftegaz, TNK-BP, LUKOIL. Antipinsky Oil Refinery receives oil from their oilfields via the pipeline system of Transneft and by railway transport. In April this year we entered into a contract with the subsidiary of Transneft JSC, Sibnefteprovod, consolidating all the production activity of oil companies operating in the Khanty-Mansi Autonomous Area and the Tyumen Region. Now every year we have an opportunity to receive up to 6 million tons through the pipeline, and more than 1 million tons directly by railway from the oilfields proper. In addition to that our New Stream group plans to acquire two oil producing facilities.
- What kind of assets are these?
- I can say that these are the enterprises which have been existing for many years in the Khanty-Mansi Autonomous Area. The reserves of the first oilfield are estimated at 10 million tons, those of the second one Ц 70 million tons. One of our subsidiaries will service them. Antipinsky Oil Refinery will receive around 1 million tons of oil from these oilfields annually. It is the first step forward to our own crude oil production.
- What other plans does your New Stream group have?
- At the present time the group plans to acquire oil-producing assets, facilities for the transshipment of products for export, further development of refining facilities, as well as the extension of the retail network of refueling stations. Plans are in place to ship our products to European countries by ourselves, but for this purpose we need export-related facilities, such as terminals. That is why we consider a possibility of the acquisition of transshipment facilities in one of the north-western cities of Russia. Then we will start developing our own logistics on the basis of our two subsidiaries which are being established now. The entire business in question will be united under the same brand Ч New Stream. As a result we want to run oil production and refining on our own, to sell products through our own refueling stationsТ network, ship products by our own transport to ports, and then export them using our own terminal. And our own trading company will sell these products in European countries.RosBusinessConsalting News Agency