Russian oil independent denies control by its founder

Russian independent oil producer Russneft has distanced itself from its founder, the prominent Russian businessman Mikhail Gutseriyev, after he was sanctioned by the European Union for his financial support of Belarus President Alexander Lukashenko.

In a statement, Russneft said that at a meeting earlier this week, its directors resolved that the oil magnate has no “control of any kind” over the company, after hearing reports of three European independent legal consultants hired to advise the oil producer.

The resolution appears to be aimed at the attention of European authorities and company’s customers in Europe.

Last month, European majors and traders started to refuse buying oil export cargoes originating from Russneft and another Gutseriyev-affiliated producer, Neftisa, to comply with EU sanctions that came into effect on 21 June.

This refusal has reportedly put Russneft under financial strain just months after it had managed to evade being declared bankrupt.

However, earlier this year, in its latest consolidated financial report for 2020, Russneft said that Gutseriyev was the sole person who had “the ability to exercise control over the company”.

According to the report, Gutseriyev — together with members of his family — had more than a 33% shareholding in the producer via three affiliated firms, as of 31 December 2020.

In its statement, Russneft affirmed that Gutseriyev “does not own directly or indirectly” the majority of the company’s shares.

He has no agreements with other shareholders to “exercise dominant influence” over the oil producer, with the Russneft’s statute containing no clauses to provide such authority to him, according to the company’s directors.

Russneft also said that Gutseriyev had resigned from the company’s board of directors at the end of June.

A new 12-member board has subsequently been formed that includes four independent directors and three representatives of international commodity trader Glencore, which holds more than 31% equity in Russneft.

The company reported production of about 128,000 barrels per day between January and May this year, with almost 40% of the volumes being exported internationally. It has 120 oil and gas fields under its control in various Russian regions.