Tatneft to return oilfield service companies, getting rid of tyre assets
Tatneft has received half of the assets of TagraS holding, and the withdrawn tyre assets can qualify for the purchase of the Nokian plant
Tatneft has disclosed the final value of the transaction for the purchase of assets from the oilfield service company TagraS, controlled by Shafagat Takhautdinov. The takeover of half of his holding company cost oil companies 25,6 billion rubles, follows from the IFRS statements published on 29 August for the first half of 2022. Against the background of recent events, the transaction can be called fairly fair, since the acquisition price is comparable to the total annual revenue of these companies of 21,9 billion rubles. Besides, Tatneft sold tyre assets worth 35,5 billion rubles on installment payment terms. Read the details of the transactions in the material of Realnoe Vremya.
Biting off Takhautdinov's half
Tatneft has completed the acquisition of the oilfield service business from TagraS Holding, established 18 years ago as a result of outsourcing a whole range of service works to a private contractor. The company from Almetyevsk initiated the reverse process of returning the oilfield companies withdrawn at that time earlier that year as part of a programme to develop its own service block. The perimeter of the deal included eight of the 16 backbone enterprises of TagraS-Holding. Their redemption took place sequentially, in two stages, but without delay: the first and main five enterprises were acquired in May, the remaining three — by August of that year. The details of the transaction are disclosed in Tatneft's IFRS financial statements published on 29 August for the first half of 2022.
“In the third quarter of this year, as part of the development of the oilfield services unit, the group completed the acquisition of the oilfield service business," says a note on the event that occurred after the reporting date of IFRS (June 30, 2022, — author's note).
Drillers rated wrong
The main stage of the transaction occurred in the second quarter of 2022 — then the group acquired movable and immovable property, as well as shares in Tatintek PLC, Tatspetstransport Management Company PLC, TagraS-Khimservis PLC, KRS-Service PLC from TagraS-Holding enterprises and gained control, becoming the only participant of the companies. At the same time, the main asset of Tatburneft was purchased — the largest drilling company in Tatarstan with experience in the construction of wells of any complexity category, including multi-hole, horizontal shaft, paired horizontal wells in the fields of ultra-viscous oil (bitumen). It operated not only in the fields of Tatarstan, but also in Perm Krai, Udmurtia, Orenburg Oblast, Samara Oblast, Saratov Oblast, and Ulyanovsk Oblast. Its revenue in 2021 amounted to 5,1 billion rubles, a decrease of 44% compared to 2020.
Then the purchase price was 6,291 billion rubles. The money was paid in full in the II-III quarters of 2022. In its report, Tatneft writes that as of June 30, 2022, the assessment of the fair value of the assets and liabilities of the acquired subsidiaries has not been completed, and the compensation transferred by the group is based on the results of the assessment of the business value of the acquired organisations as a whole.
NKT-Servis PLC, Mekhservis-NPO PLC, and TMS-Logistika PLC were also acquired — this part cost oil companies 19,342 billion rubles. The money will be paid in full by the end of the third quarter of 2022. In total, 25,6 billion rubles will be spent on the purchase of the oilfield service from Tatneft.
Their main focus is the repair and maintenance of oilfield and diagnostic equipment. For example, Mekhservis-NPO is engaged in the repair and maintenance of oilfield equipment, its revenue amounted to 2,3 billion rubles last year. NKT-Servis provides comprehensive diagnostics, repair and testing of downhole pumping equipment with revenue of 2 billion rubles, and TMS-Logistika keeps records of property, is engaged in warehouse logistics and has revenue of 1 billion rubles. Tatneft gained control in these companies, becoming the only participant, it notes.
“The acquisition of additional assets is primarily due to that Tatneft is developing and expanding its activities. We want to provide high-quality services," the need for the transaction in the company was explained earlier. At the same time, it was pointed out that the possibilities of the oil service in technical re-equipment and high-tech development are limited due to OPEC+ restrictions and high loan rates.
Anyway, TagraS-Holding still has eight of the largest enterprises associated with conducting geophysical work under foreign contracts.
Changing tyres for oil field
The source of payments for assets could be the proceeds received by Tatneft Group from the sale of the tyre business. As follows from the report, the company received 35,555 billion rubles under installment payment terms.
“The fair value of the compensation, determined on the basis of discounted cash flows, amounted to 11,499 million rubles. In the context of significant changes in the economic situation, including those caused by geopolitical processes, the sale of the tyre business will allow the group to concentrate on key strategic projects," the report says. In other words, Tatneft exchanged tyre assets for oilfield service ones.
Earlier, Tatneft produced tyres under the Kama Tyres brand, but after the introduction of EU sanctions against tire companies, the oil company sold the business to Tatneftekhiminvest Holding. But this does not mean that Tatneft is going out of business. On 29 August, Kommersant reported that the structures of the Tatarstan's PJSC and Roman Trotsenko's AEON corporation are applying for the purchase of the tyre factory of the Finnish manufacturer Nokian Tyres in Leningrad Oblast. The asset is estimated at €400 million. It is noteworthy that Trotsenko has been interested in chemical assets for several years: in 2019, he acquired the Volgograd plant Khimprom (for the methanol production project), and in 2020 — Tatarstan Ammonia, but he had nothing to do with the tyre business.