Moscow, 29 December 2000; Sibneft has created a new wholly-owned subsidiary, Sibneft Oil Trade, to act as agent for all its exports of crude oil and refined products from the beginning of next year. This pioneering move offers fresh evidence of Sibneft's commitment to set a new benchmark for financial transparency in the Russian oil industry.
The creation of Sibneft Oil Trade is a cornerstone of the company's strategy of consolidating the various parts of its business into a fully integrated company, in order to streamline operations and bolster transparency. The financial results of Sibneft Oil Trade will be fully consolidated into Sibneft's GAAP accounts.
Sibneft last year exported 5.021 million tonnes of crude oil, equivalent to 31% of production, and 2.112 million tonnes of refined products, roughly one fifth of the company's output. Sibneft's exports are currently handled by a Gibraltar-registered affiliate, Runicom.
Runicom is a leading international trader of crude oil, refined products and petrochemicals. Over the course of its six year history, the company has established an enviable reputation as one of the most innovative, professional and forward-looking trading companies operating in the CIS.
In addition to acting as export agent for Sibneft, Runicom also handles exports on behalf of other companies. The role of an export agent is to act as a bridge between a Russia-based company and international buyers, supplying services such as freight and insurance which a Russian company is unable to provide promptly due to tax regulations and other capital controls.
Sibneft has focused on making its relationship with Runicom as transparent as possible, including full disclosure of revenues from the sale via Runicom of crude oil and refined products. Runicom's accounts are audited to IAS standards by Arthur Andersen. Sibneft Oil Trade will be managed by the same team of executives responsible for the success of Runicom.