Russian oil champion on charm offensive

In a control room 130 kilometers (60 miles) above the Arctic Circle, oil workers in crisp yellow and black overalls fine-tune pumps and turbines with the click of a mouse.

A brand-new pipeline, glittering in the low polar sun, threads off over the icy horizon.

Not, perhaps, how you might picture the operations of a Russian state oil firm best known until a few years ago as a listless pile of oil assets left over from the chaotic post-Soviet privatizations of the 1990s.

But today OAO Rosneft is a dynamo on a public relations frenzy. A public listing tentatively scheduled for July could raise US$20 billion (euro16.24 billion), according to Russian officials — making it the largest since Japanese mobile phone operator NTT DoCoMo Inc.’s US$18.4 billion IPO in 1998 — and the company is keen to trumpet new subsidiaries such as Severnaya Neft, which taps the Val Gamburtseva fields in Russia’s far north.

The IPO, analysts say, is also a PR campaign for the Kremlin.

By offering stock on foreign markets, they say, President Vladimir Putin will make palatable a controversial drive to regain control over the strategic oil industry. Already, the state has a grip on 30 percent of Russian oil production, and it pushed foreign companies largely into the role of minority partners drafted to bring in the know-how to tap new and challenging fields.

And by subjecting the company to the rigors of transparency and accountability that attend a foreign listing, the Kremlin hopes the IPO will improve Russia’s image as a stable energy supplier.

Business Week