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Rosneft plans to set up energy bank

Russia’s oil champion will kick start its own Rosneft Bank to support and promote the country’s energy industry. The bank will be the second energy-oriented lender in the country, joining one of the top market players, Gazprombank.

Rosneft’s full-service financial institution “will assist in implementing large-scale international projects, streamline Rosneft’s system of crude oil and petroleum products trading and provide a full range of high-quality financial services to individual and corporate clients in the oil, gas and energy sectors,” the company report said.

Former Morgan Stanley managers will head a strategic advisory group of the bank. Rair Simonyan, Elena Titova – who used to head a Russian office of Morgan Stanley – and Walid Chammah – a former co-president at Morgan Stanley International – will consolidate Rosneft financial assets and launch the company’s financial vehicle.

Today Rosneft owns Russian Regional Development Bank (RRDB), that is far below top the positions in Russia’s banking rankings, according to Vedomosti daily. As of October 1 RRDB took the 58th position on the Interfax Center for Economic Analysis list, with $2.8 billion in assets.

Rumors about Deputy Prime Minister Igor Sechin’s plans to kick start its own industry bank leaked into the Russian press in early November, after it became clear that some of the Morgan Stanley managers were leaving the institution. Simonyan, for example, was a close business associate of Sechin, as he took part in huge Rosneft deals, such as the company’s IPO and a sale of Yukos assets, after the latter Russian oil company went bankrupt.

Sechin likes to control everything and he’s quite capable of setting up a second Gazprombank, Steven Dashevsky, a managing director at Dashevsky & Partners, told Vedomosti earlier. Let alone the coming acquisition of TNK–BP, the financial turnover of Rosneft structures bring huge amounts of money, which is quite enough to maintain a separate bank, Dashevsky concluded.

Gazprombank is Russia’s third largest lender, with the country’s gas industry being a key operation area. In mid–October 2012, Rosneft agreed with the major TNK-BP shareholders – the Russian Alfa Access Renova (AAR) consortium and British Petroleum (BP) – to buy out their 50% stakes. Under the agreement, BP and Rosneft have an exclusive period of 90 days to make final arrangements, which include getting approval from the governmental and regulatory bodies.

After the deal is completed, Rosneft is set to become the worlds’ largest listed oil company.