Foreign expansion

According to Czech media (15 November 2012), Russian state nuclear power corporation Rosatom may acquire a 49 per cent interest in the JV Nuclear Energy Company of Slovakia from Czech energy company ČEZ. The other partner in the JV is Slovakia’s JAVYS.

The JV is building a new power unit of the Bohunice Nuclear Power Plant project located in Slovakia.  The construction contract is worth an estimated GBP 2.4 billion. Rosatom also supplies reactors for two units being built at Slovakia’s Mochovce Nuclear Power Plant.

According to the Russian business daily Kommersant (2 November 2012), Gazprom has broken into the European electricity market through Serbia’s NIS, which is controlled by the gas and energy concern. NIS is considering l participation in two projects relating to the construction of gas heat power plants in Serbia, firstly the modernisation of a plant in Novi Sad, which is currently owned by the state. NIS is interested in at least a 50 per cent interest. It may acquire the interest with a partner – Slovakia’s GGE.

In addition, NIS is considering the construction of a heat power plant in the city of Pančevo once again potentially in partnership with GGE.

These projects, if they proceed, with finally provide Gazprom with access to the European electricity market. It had sought to participate in a global electricity partnership with Germany’s RWE back in 2011, but these plans have so far not come to fruition.


In its IFRS financial statements for the first nine months of 2012 Rosneft discloses the amount that it paid for a 30 per cent interest in the Harmattan acreage in the Cardium formation of the Western Canada Basin in Alberta, Canada. It acquired the interest from ExxonMobil in April 2012 as part of a number of agreements to implement a long-term Strategic Cooperation Agreement concluded in August 2011. Rosneft opted for a partnership with ExxonMobil after abortive attempts to link up with BP, scuppered by litigation commenced by BP’s partner in TNK-BP.

Rosneft and ExxonMobil agreed at the time to jointly develop oil and natural gas projects in Russia and share technology and expertise, in particular potentially promising offshore projects in the Russian Arctic and Black Sea regions.

It transpires from the financial statements that Rosneft paid RUB 2 billion for the Harmattan interest, considered a fair price, as it will provide the state-controlled oil and gas corporation with access to ExxonMobil’s technology.



According to Kommersant, state-owned machine-building company UralVagonZavod is considering the acquisition of another foreign asset, holding negotiations with the Serbian government over the purchase of steel manufacturer Zelezara Smederevo.

Analysts believe that the purchase could become an albatross around the company’s neck, as the steel manufacturer is loss-making and has outdated assets. Zelezara Smederevo was sold back to Serbia by US Steel for a symbolic 1 dollar in January 2012, as it had incurred losses of USD 100 million in 2011.

For this reason analysts assume that the negotiations with the Serbian government are a political move.


On 12 October 2012 Kommersant reported that Rosneft has been holding negotiations on the construction of an oil product pipeline through Mozambique to Zimbabwe, including the construction of a major storage facility in Harare.

Roman Trotsenko, former head of the United Shipbuilding Corporation and currently adviser to the Rosneft CEO, says all the legal documents, JV agreement and all the permits for the passage of the pipeline will be adopted by the end of 2012.

According to the article, the project could set Rosneft back USD 700 million and is part of plans to transform the state-owned oil company into a major global player. However, analysts cite high risks related to the project.

According to the Daily Telegraph, Rosatom has expressed an interested in participating in new nuclear build programmes in the UK – provided that they actually go ahead and opposition to Russian involvement in nuclear builds due to security concerns is overcome.

The Russian state-owned nuclear operator could acquire an interest in the Horizon projects or participate in plans by France’s EDF to build a new power plant in Somerset.