Kozachok at "OMV Petrom"

Strapped for cash, the Romanian state has decided to sell 9.84% of the 20.64% stake it holds in "OMV Petrom" through the Ministry of the Economy, Trade and Business Environment (MECMA), while retaining its significant shareholder status (over 10%).

Under pressure to honor the agreements with the IMF, in August 2010, the Government issued a set of decisions concerning the sale of some of its minority stakes (15% each), in "Romgaz", "Transelectrica" and "Transgaz", throwing in the stake in "OMV Petrom" as well.

The authorities used the excuse claiming that the sales were intended to finance the budget deficit at a lower cost.

• THE CALL FOR TENDERS

In the months of March and April, the Ministry of the Economy, Trade and Business Environment (MECMA) held the call for tenders for the selection of the intermediary that would handle the sale of the stake in "OMV Petrom", which was won by the consortium led by Russian group "Renaissance Capital" (the consortium includes "EFG Eurobank Securities", "BT Securities" and "Romcapital").

Essential in the outcome of the call for tenders was the very low commission that the winning consortium charged (1.74 million Euros, calculated based on Friday"s closing price for the shares of Petrom on the BSE), nearly half of the second lowest offer of its competitors and three to four times lower than the most expensive of them.

If the sale were to take place through the BSE, then the exchange would earn about 726 000 Euros in commissions, (calculated using the Exchange"s fee of 0.135% for secondary offers, considering the total estimated value of the package on offer), which would reduce the earnings of the consortium to about 1 million Euros.

• A TENUOUS PROFIT

But the consortium will also need to pay off their lawyers which provided legal services and to cover their own employee costs, meaning that their profit from this project will be very low, or at best could amount to 100,000-150,000 Euros for each of the four companies which make up the consortium.

Not worth the effort, considering the size of the operation and of the financial companies involved.

This is why, avoiding the BSE entirely through the sale procedure and allocating the block of shares through private placement looks like a realistic idea for the consortium, allowing it to double its profits.

Even though the private placement seems to be the logical option, it also follows another logic - that of the Russian energy strategy.

• THE RUSSIAN ENERGY STRATEGY

"The program for the efficient and systematic use of the foreign policy factors for the long term development of the Russian Federation", launched last summer by the Russian Ministry of Foreign Affairs and approved by president Dmitri Medvedev, stipulates the consolidation of the Russian relations with the European Union and the United States, described as preferred partners for developing investments for the modernization of the economy and infrastructure.

Romania appears as a separate subchapter on the list of objectives of interest to the Russian Federation. The document emphasizes the need to strengthen the Russian business in the strategic sectors of the Romanian economy, first of all in the energy and oil complex, and in the ferrous and non-ferrous metallurgy sector, including by participating in the privatization of the Romanian state owned companies.

Obviously, the stake of 9.84% of "OMV Petrom" meets the Russian program, to such an extent, that it is seems to be accurately described in the document of the Russian Federation, except for the fact that its name was omitted.

• RUSSIAN HABITS

It is well known that the major Russian companies always synchronize their action and development strategies with the strategies of the Russian state administration.

It is also well-known that Russian industrial giants conceal their presence through "dummy corporations", making it very hard to prove their presence in shareholder structures.

Under these circumstances, there is no guarantee that, in the case of "OMV Petrom", the private placement that the consortium led by the major Russian bank "Renaissance Capital" doesn"t actually end "fortifying" the Russian business in the "Romanian oil complex".

• "RENAISSANCE CAPITAL"

In May 2007, Mikhail Dmitrievitch Prokhorov (who in 2011, had an estimated fortune of 22.7 billion - the third richest Russian and the 39th richest man in the world), launched his "ONEXIM Group" investment fund, which had assets valued at 17 billion dollars, at that time.

In September 2008, "ONEXIM Group" acquired 50% of "Renaissance Capital", a major Russian investment bank, the very one which, as part of a consortium, won the call for tenders for intermediating the sale of the stake in "OMV Petrom".

• IS THE OMV A FRONT FOR THE RUSSIANS?

"There are suspicions that the OMV is nothing but a front for the Russian investor",

Zsolt Hernadi, the executive CEO of MOL explained two years ago, before the Commission for Foreign Relations of the Parliament of Budapest, quoted by Reuters, this being one of the most outspoken statements on the subject, out of a long line of similar suspicions expressed along the years by many voices, including by president Traian Băsescu.

The Austrians of OMV were accused of selling out the "European Energy Solidarity" to the Russians, as the European continent is looking for the alternative to ending its dependence on the Russian Federation (which is speculating its position of power, both politically and economically).

• "OMV PETROM" FACING EAST

The main shareholders of "OMV Petrom" are the energy group "OMV" (51.01% of the shares), the Proprietatea Fund (20.11%), the European Bank for Reconstruction and Development (2.03%), the Ministry of the Economy, Trade and Business Environment (20.64%); 6.21% of the company is floated on the Bucharest Stock Exchange (BSE).

If OMV is indeed a front for the Russians, then their potential direct acquisition of the stake of 9.84%, which the Ministry of the Economy is going to sell, would make them the dominant shareholder in the company, giving them an undeniable influence over our energy strategy and, even more, over our entire economic strategy.

Going from 60%, which is how much the Russians would hold if everything happened as described above, to 75% (the level where, according to the Romanian Companies Law, the majority shareholder has a right of life and death over the company), wouldn"t be much of a stretch, if the Proprietatea Fund gets involved.

• RUSSIANS AND INDEPENDENCE FROM THEM

Out of the 3,300 kilometers of the "Nabucco" pipeline (designed to lower the dependence of European states on the energy resources coming from the Russian Federation), 457 km will be located on Romanian territory.

The shareholders of the pipeline are the ones who will negotiate the contracts for the supply of natural gas.

"Nabucco" has six shareholders, each holding 16.67% of Nabucco Gas Pipeline International GmbH: MOL (Hungary), Transgaz (Romania), Bulgarian Energy Holding (Bulgaria), Botas (Turkey), RWE (Germany) and...OMV (Austria).

Through intermediaries, Romania imports about one third of its domestic consumption of natural gas from Russia (17-18 billion cubic meters a year), of which two thirds are imported by "OMV Petrom" and "Romgaz".

We can imagine an absurd scenario: the potential Russians behind "OMV Petrom" gain their independence from Russian gas, through the gas pipeline built through the enthusiastic contribution of the potential Russians behind OMV.

And when you think that the entire scenario started from a commission that is too small!...