The Sunday Telegraph (UK): The oligarchs battle for oil: “Meanwhile, Sibir Energy also has strong partnerships with Western oil companies. There is a joint venture with BP in Moscow's petrol stations and a promising joint venture with Shell in the huge Siberian Salym oilfield.” (ShellNews.net) 19 Dec 04

(Filed: 19/12/2004)

Tchigirinsky lost an oilfield and his Aim listing. He tells Simon Bell that he's back in the market

For a man who has mislaid an oilfield, Chalva Tchigirinsky, the Moscow tycoon, is showing remarkable sang froid. Eight months after the shares in Sibir Energy, his joint British and Russian company, were suspended on the Alternative Investment Market (Aim) in London due to the oilfield's disappear- ance, he is back in town to re-list Sibir on Tuesday as "a stronger, better and more efficient company than before".

Tchigirinsky's problems began earlier this year when Sibir's stake in the Siberian oilfield Yugra, which had started at 50 per cent - worth an estimated $111m (£57.2m) - was massively diluted, so that Sibir eventually ended up with less than 1 per cent of it.

What appears to have happened is that Yugra issued new shares to Sibneft, the oil company belonging to Roman Abramovich, Tchigirinsky's partner in Yugra. "Sibir's interest in Sibneft-Yugra has been misappropriated and we will have it back," he said at the time.

The passage of time has cooled his temper. "I was extremely angry," Tchigirinsky says, in an interview with The Telegraph. Alleging that the deals that allowed Abramovich to seize control were unfair, he says: "I thought Russia was through that period of its history."

Sibneft insists that it has done nothing wrong: "There were a whole bunch of agreements between ourselves and Sibir's shareholders. Everything Sibneft has done since then has been in accordance with those agreements."

Tchigirinsky asked Sibneft to return his oilfield. "I met Eugene Shvidler [Sibneft's chief executive] at the airport and he said he knew nothing about it. He even denounced it," Tchigirinsky says.

For several months, in fact, Sibneft denied seizing Yugra until, in June, the company disclosed that it was indeed the owner of the new shares.

With several court cases pending in Moscow, the energetic 55-year-old Tchigirinsky - whose stake in Sibir, where he is a non-executive director, is set to rise to 52 per cent next week - is bullish. "I expect 90 per cent of our shareholders have written off Yugra," he says. "We haven't written it off. I'm 100 per cent certain we'll get Yugra back."

If the tycoon succeeds, he will restore a jewel to Sibir's portfolio. Before April, Sibir's shares were trading at 28p; about 6p represented Yugra.

By contrast with some of his overnight-billionaire compatriots, Tchigirinsky has come slowly to riches. Born in Georgia, he swiftly moved to Moscow then lived in Germany until 1988, where he gained experience of foreign businesses and investors. He set up his construction company, S&T, co-owned with a German banker, in Moscow at the beginning of the 1990s and soon forged a strong relationship with the Moscow City Administration, in particular, with Yuri Luzhkov, the powerful mayor of Moscow.

In the maelstrom of Muscovite politics, Tchigirinsky is wary of committing himself to any political position. "I play billiards with Luzhkov," he says cautiously. "The last two times he beat me."

But there is no doubt that this carefully nurtured relationship with Luzhkov, an old-style city boss, has enabled him to win many prime sites in Moscow for redevelopment. In the 1990s he built four of the biggest new office blocks to house international companies, as well as the famous Alexander House, a mansion he built for the oligarch banker Alexander Smolensky.

After Smolensky's fall, the house became Vladimir Putin's presidential campaign headquarters. Now Tchigirinsky has acquired the most prestigious site in Moscow, the Rossya Hotel next to the Kremlin. "I hope the British architect Lord Foster will be designing the new development."

But, according to Tchigirinsky, it wasn't all easy. "In the early days," he says, "we didn't have the money to pay contractors. One night I went to a casino, the Club Royale, and won a few thousand dollars. I went back 19 times and won every time and was able to pay."

Tchigirinsky's good relations with Luzhkov yielded the greatest prize of all, however, in the Moscow Oil and Gas Company (MOGC), which came complete with Moscow's only oil refinery. Owned jointly by Sibir, Moscow City and Abramovich's Sibneft, MOGC became the focus of a fierce nine-month battle between Luzhkov and Abramovich for control of its management. Luzhkov and Tchigirinsky won.

"I think this was the source of Abramovich's actions over Yugra later," he says. By depriving Tchigirinsky of Yugra, Abramovich also deprived him of an asset that the company was a "pledge or consideration" for the important stake in MOGC.

It is a testament to the closeness of Luzhkov and Tchigirinsky that the mayor this year accepted another Sibir oilfield of far less value than Yugra as the tycoon's "pledge" for MOGC.

Meanwhile, Sibir Energy also has strong partnerships with Western oil companies. There is a joint venture with BP in Moscow's petrol stations and a promising joint venture with Shell in the huge Siberian Salym oilfield.

Sibir's strengths lie in the fact that none of the company's oil assets were taken from the state in the alleged scams of the 1990s. But that didn't make is any easier for it to hold on to Yugra.

Meanwhile Tchigirinsky's close partnership with Luzhkov will not be quite so valuable when the mayor finally stands down. It remains to be seen if the tycoon's excellent talent for forging connections will work with a new mayor. As Henry Cameron, Sibir's chief executive and a Scot, says: "In Russia you can expect anything."

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2004/12/19/ccsibir19.xml