President of Lukoil: Ukraine is more important to us than Crimea, and America is more interesting than Russia
Moscow - Kyiv, June 26 (Navigator, Mikhail Stamm) - Vagit Alekperov, the largest co-owner and president of Lukoil, said that Ukraine is more important for his company than Crimea, that new oil production projects in Africa and America are more interesting for Lukoil than new projects in Russia, and that he does not believe in Russia’s transition to trading oil in rubles. Alekperov has been vacationing in Crimea for the last 18 years, but perhaps he will not go there again. The company is also no longer going to supply fuel to the peninsula.
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“For us, stability in Ukraine is very important for business to develop,” said the president of the largest private oil company in the Russian Federation in an interview with Vedomosti. – Lukoil employs about 5000 people in Ukraine. We have a retail business there - about 250 gas stations and the Karpatneftekhim petrochemical complex […]. We have maintained excellent relations with […] the authorities.”
“We have gas stations in all regions of Ukraine, mainly in the central part, in the south and in the western part of Ukraine. There were excesses, people came with pickets, but implementation is progressing steadily everywhere,” says Vagit Alekperov. As for Crimea, after joining Russia, the “Russian” company completely left: Lukoil sold all gas stations in Crimea at a discount to the local operator, and the company is no longer going to supply its fuel to the peninsula.
Alekperov admitted that he vacations in Crimea every year, for 18 years in a row, but when asked whether he would go this year, he replied: “I haven’t gone yet (laughs), I don’t know yet.”
The president of Lukoil said that the sanctions and the cooling of relations between Russia and the West “affected all companies: as a rule, all of them had their ratings lowered by one notch, including Lukoil.” “In any case, this is reflected in the capitalization of the company and its ability to access financial markets […] We, as you know, have postponed the placement of Eurobonds from spring to autumn: […] maybe the rating will be changed and cheaper and longer-term bonds will become more accessible money".
Business projects in the EU, America, West Africa and Iran are more interesting for Lukoil not only than business in Crimea, but also than new business projects in Russia, where the cost of oil production is higher, Alekperov admits. “The company operates in 26 European countries, we have five powerful divisions in the European Union, including four large factories, and a retail network operates stably in America,” said the president of Lukoil […] We are looking at West Africa in detail. We are entering into new projects there because we believe that this is one of the most promising provinces. We consider Mexico very promising. Lukoil has already opened an office in Mexico City. We hope that after the discovery of Iran we will have the chance to enter a new project or return to the old one, in Anaran, which we opened together with Statoil.”
The co-owner of the largest Russian company perceives the war in eastern Ukraine as an annoying obstacle to his global business. According to Alekperov, so far “in the production segment we have not noticed any change in attitude - neither from the population nor from the authorities of the countries where we are present.”
“Now everyone (Western authorities - editor’s note) has paused to understand how quickly the situation will stabilize,” says Alekperov. – And the question is no longer so much about Crimea, but about the east of Ukraine. Of course, everyone is waiting, monitoring, watching. We hope that the situation will stabilize. In any case, military conflicts always end in negotiations; even great wars have never been endless; even hundred- and thirty-year wars have ended in negotiations. So we need to carry out a negotiation process to resolve these issues.”
The oil oligarch does not particularly believe in plans to weaken Russia’s economic dependence on the West and in the project announced by Russian Presidential Adviser Sergei Glazyev to switch to international oil trading in rubles on the Russian exchange.
“We are already so integrated into the global economy, into the global financial market. We are integrated. Therefore, today the transition to rubles... You see, tools must be created for this: hedging tools, access to cheap trading money, in order to effectively sell the goods not at the well, but to the end buyer. […] Have such institutions been created here? No. And we are still tied to the London Stock Exchange - to the global oil price quote. There are two varieties that have a global quotation, which everyone focuses on - and so do we. Therefore, today it is impossible to declare a transition to the ruble.”
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