Neftgazsbyt acquired a 51.9 percent stake in the Mendeleev-Rusoil fuel refinery and lubricants plant from Slavneft for an undisclosed amount.
The sale was motivated to improve the companys operational structure and by the necessity to focus investment resources on upgrading Yaroslavnefteorgsintez, our key refinery, the oil major Slavneftsaid in a press release. Slavneft is a 50-50 joint venture between Gazpromneft and TNK-BP. In 2010 the Rusoil refinery was valued atU.S. $15 million, according to a Deloitte and Touche CIS audit report.
Based in Konstantinovsky, Yaroslavskaya oblast, the Mendeleev-Rusoil refinery was built in 1879, making it one of the oldest lubricant manufacturers in Russia. It produces fuels, motor, transmission, transformer andindustrial oils as well as greases, coolants and additives.
Feedstock for the finished lubes is supplied by Slavnefts Yaroslavnefteorgsintez 250,000 metric ton per year API Group I base oil refinery.
In accordance with the contract, Moscow-based Neftgazsbyt signed a deal with the local Yaroslavl oblast government to modernize and utilize the refinerys capacities and to continue the companys social and environmental programs, Slavneft said. Russias Federal Antimonopoly Service approved the acquisition on April 5.
Since 2007 Slavnefts board of directors tried to sell Rusoil twice, but without success. One obstacle was the refinerys obsolete technical conditions. Also, the previous two bidders failed to fulfill their financial obligations, Kommersant daily reported in 2010.
In 2009 the plant produced only 3,000 tons of lubes. It has been operating with big losses in the last several years. In the first nine months of 2011 Rusoils losses amounted to 197 million rubles ($6 million), according to DataKapital, a Russian online database.