Sibir Energy Share Discussion Threads

[alwaysbanking] 19/10/2008 11:00

Or a very famous football club to add to the property portfolio

[alwaysbanking] 19/10/2008 08:19

I like this article but the bit I really like is about threequarters of the way down. 'by Sibir suing Mr Abramovitch in London. A ruling is expected this month'. If as is expected by HC it goes in SBEs favour - then the share price could easily double or more


Alignment of interests is crucial

By Toby Shelley

Published: October 1 2008 03:00 | Last updated: October 1 2008 03:00

Royal Dutch Shell's interest in Sibir Energy is an acknowledgment of the smaller company's success in securing its position in Russia.

That achievement was capped in July when London-listed Sibir and Gazpromneft agreed to transfer their shares in the Moscow refinery to an independently managed, Dutch-registered vehicle.

The deal resolved a dispute crucial to Sibir's ambitions as an independent, integrated oil company - a row that pitted it against Gazpromneft's owner, state-controlled Gazprom.

It also snapped into place all pieces in Sibir's strategic jigsaw. For Henry Cameron, chief executive, the breakthrough came in December when the head of Gazprom, Alexei Miller, signed off on the deal along with Yuri Luzhkov, the mayor of the city of Moscow, which holds an 18 per cent stake in Sibir.

Their assent meant Sibir had achieved the strategic goal of aligning three sets of interests: those of the Russian state, those of Russian investors Chalva Tchigirinski and Igor Kesaev - who own 47 per cent of the company - and those of the western management and minority shareholders.

Mr Cameron's says this alignment secures Sibir's interests by reducing the risk faced by foreign companies operating in Russia. The perceived perils mean investors typically apply a reduction rate of 12-15 per cent to discounted cash flows for Russian assets, higher than the usual 10 per cent for non-OECD assets.

With a 50 per cent stake in the prolific Salym oil field and control of the principal refinery supplying Moscow, plus a 20 per cent share of the capital's retail fuel market, Sibir's assets looked strategic enough to be of in need of protection.

That need became more stark when Gazprom bought the assets of oil group Sibneft from Roman Abramovitch in 2005. That deal gave Gazprom a share in the Moscow refinery and an inherited dispute with Sibir over the South Priobskoye oil field, where Sibir alleges its 50 per cent stake was illegally diluted by Mr Abramovitch's company.

Gazprom wanted control of the refinery and much of the past two years has been spent finding a way to satisfy all parties. The reconciled partners are now considering buying out minority shareholders and investing $1bn (£550m) to expand the plant. The South Priobskoye issue has been taken out of the equation for now by Sibir suing Mr Abramovitch in London. A ruling is expected this month.

Marrying Russian ownership with a western management and stock market listing is now a "necessary condition" for operating in Russia, says James Fenkner, founder of Red Star Asset Management in Moscow. "You need feet in both the Russian and the western camps," he says.

The roots of Sibir's strategy lie in Mr Cameron's experience with fishing companies trading with or based in former Soviet bloc countries. Mr Cameron observes: "They felt patronised by the west . . . it was obvious there was going to be a backlash."

That conviction persuaded him that Sibir needed to attract majority Russian ownership, eventually resulting in Bennfield, controlled by Mr Tchigirinski, fulfilling that role in 2000.

Russia's recent economic history has been interwoven with the fortunes of entrepreneurs who became wealthy by acquiring former state assets. But the fates of Yukos founder Mikhail Khodorovsky - in jail - and Boris Berezovsky - in exile - illustrate the risks of being suspected of inappropriate political ambitions.

Mr Cameron argues that Mr Tchigirinski is not someone likely to be targeted by the government. But if Mr Tchigirinski is not a political player, Mr Luzhkov's post is political and highly valuable as a conduit between the Kremlin and Sibir.

Mr Cameron says Sibir was scrupulous in ensuring that when Moscow took a stake in Sibir, the deal was thoroughly scrutinised.

Nonetheless, Sibir' stock continues to be discounted alongside that of other companies working in Russia and suspicions still survive.

[alwaysbanking] 19/10/2008 07:59

Investment experts 'said the turmoil could present the best buying opportunity in a generation for the very brave.

"For long-term investors, there are some causes for optimism. Equity markets are now firmly pricing in global recession, with shares on some measures the lowest for a generation," said Paul Niven at fund manager F&C.

Company directors seemed to agree, buying their own shares with gusto. Directors' dealings - traditionally a key "buy" signal - last week spiked to a buy-to-sell ratio of 25-to-1 by volume. That compares with a long-term average of 2.5-to-1, an average of 8-to-1 in the past 12 months and a ratio of 10-to-1 at the end of the 2003 bear market, financial data firm Digital Look said. "Thank heaven somebody has faith in the longer-term prospects for the stock market," said director Andy Yates.

"Directors think that the current share sell-off has gone far enough and that valuations have reached such a level that there are bargains to be had."

[alwaysbanking] 17/10/2008 13:10

News flow now 'gushing' - Production from the company at a record.

[wikroberts] 17/10/2008 11:31

Kibes, yesterday Medvedev tried to "pursuade" oil companies to reduce the retail oil prices as they are in Russia now way above what they are in the US...Plus, there is no "domestic" Russian recession so far, just growth slowing.

[kibes] 17/10/2008 09:56

A3477681- what happens to the domestic oil price in a Russian recession? In 1998, it was around $5/barrel and all Russian oil companies were close to bust. And similarly again in 2003. They only kept afloat by oil sold for export, which was limited to about 30% of total produced. What is the price going to come down to now, and how will it affect Sibir? Until we know I think 220p is high enough for the shares.

[davron8] 17/10/2008 09:45

PTOLEMY. Still like knocking SBE. Six years ago you said they would fail, never get oil production going and we would all regret buying our shares. This little hic cup in the share price does not change the fact that SBE is a good long term investment.
The long term holders here know that it is our Russian shareholders who helped the company through some difficult times in past years. I have met both of them at AGM's and never once felt that they were anything other than positive SBE supporters.
You also knocked Henry Cameron as someone out of his depth in Russia and would lose everything. Today he has shown why he is such a very good CEO by his response to yesterdays share price fall. As others have posted, he placed his money where his mouth is.

[banj] 17/10/2008 09:30

Nice one HC if you are reading this :-))

[len16] 17/10/2008 07:50

with reference to steveofsw19

[alwaysbanking] 17/10/2008 07:17

len16 - apologies for my ignorance but what is there to avert?

[len16] 17/10/2008 07:15

half mill wont avert nothing.

[alwaysbanking] 17/10/2008 07:11

At least following all the trades from yesterday we know that HC was a definite buy. Like everyone is echoing HC is a company man and has SBE at his heart - if it goes wrong it wont be any of his doing. Will move on little volume mms have plenty of cheap shares to move following yesterdays panic exit.

[steveofsw19] 17/10/2008 07:04

Maybe this is the blueprint for turning it all around again.

If every CEO stumped up half a million quid of their own money, maybe we can avert FTSE meltdown?




S.

[pablo1969] 17/10/2008 07:01

Well done Henry,

at least he has put his money where his mouth is

[alwaysbanking] 17/10/2008 06:59

Wonder what the reaction will be to this:-

RNS Number : 0814G
Sibir Energy PLC
17 October 2008


Sibir Energy plc ("Sibir" the "Company")

Purchase of Shares by a Director

Sibir announces that Henry Cameron, CEO of Sibir, yesterday purchased 237,500 ordinary
shares of 10p each in the Company ("Ordinary
Shares") at a price of 209p per share. As a result Mr Cameron's holding in the Company is
916,976 Ordinary Shares, representing
approximately 0.2% of the issued ordinary share capital. He also holds 300,000 options.

Commenting on the announcement Mr Cameron said:"I purchased these shares in a show of
confidence that, despite the adverse market
reaction to yesterday's announcement, I am satisfied that our recent course of action is in
the interests of the Company".

[steveofsw19] 17/10/2008 06:57

Well blow me down with a feather!

HC has put his money where his mouth is.

An astronomical director buy!!!!!!


That smell just got a bit better. Just a bit though.



S.

[vision88] 17/10/2008 06:48

Im just begining to enjoy the smell of these, much more relistic price now, and could yet fall to new lows, depending on a number of Geo- political outcomes/Fianancial confidence /Libor rates/ capital Mkks/ and groath expectations next 1-3 quaters.but one gets the feeling its fall is over sold and ripe for a bounce, whilst a nagging doubt remains about short selling still.

[a3477681] 17/10/2008 06:46

At these levels it seems it is an extraordinary opportunity to buy. Nothing has affected its profitability from oil.

[a3477681] 17/10/2008 06:44

The announcement has been a huge surprise and I grant on the surface it doesn't seem good but I have absolute faith in Henry Cameron. He knows how to do business in Russia and above all you must have friends and look after them when they are in need. These two guys have looked after Sibir and backed the company when it was almost wiped out. They have exchanged real profitable assets for liquidity that Sibir earned due to their guidance and finance. Good quality hotels will always attract custom even in troubled times and probably more so now as fund managers and business men need to visit Russia. Maybe a little diversification is not a bad thing. The other business seems to produce oil related products for the refinery.

[steveofsw19] 17/10/2008 06:24

This is starting to smell very rotten.

I very much hope I'm wrong.



S.

[velvetide] 16/10/2008 21:13

what is constant:

losses? they're yours, profits? they're theirs;

what changes:

the methods


UEN for example is a variation on the theme

[tpain] 16/10/2008 20:58

yf23_1:

It is the not the actual purchase but the fact that the two Russian's can get away with it. They are effectively funding these russian idiots losses. Very worrying and the shareholders wil vote against it. The problem is that the money has already been spent.

[velvetide] 16/10/2008 20:42

this should catch the attention of the hotels and leisure lads, looks quite a slick set up

[miamisteve] 16/10/2008 19:42

No gas station but the hotel has a pizza hut

-----------------------------

Hotel Sovetskaya, St. Petersburg

The Hotel Sovetskaya 3* is conveniently located on the Fountain River, two stops from "Tekhnologicheskiy Institute" metro station. Embraces 3 comfortable buildings, there are 3 restaurants, a pizza hut, a coffee, a beer-garden, highly equipped modern health center. Business facilities include fax, telex, other audio-video equipment, car rental and safe deposit boxes. "Fontanka" building - single and double rooms provided with comfortable furniture, satellite TV and phone. "Rizhsky" building - single and double rooms with satellite TV.

[yf23_1] 16/10/2008 19:20

I don't think a $158m purchase warrants a £300m drop in market cap.