Streetwise Professor

April 20, 2011

A Russian Oil Company With a Heart of Gold

Filed under: Economics,Energy,Politics,Russia — The Professor @ 2:44 pm

I thought I was going to need a new computer monitor after doing a comic spit take upon reading this:

Transneft Says Higher Dividends Would Deprive Orphans, Sick

OAO Transneft, Russia’s monopoly pipeline operator, says paying more dividends would curtail aid to orphans and other charity work.

Transneft made 3.2 billion rubles ($112 million) of charitable contributions in 2009, 7.8 times more than the dividends it paid to private investors, according to the company’s financial reports. That spurred preferred shareholders such as Prosperity Capital Management Ltd. and East Capital to demand more information as they seek a larger slice of profit.

Higher dividends would reduce money destined for “the sick, supporting sport, renovating churches and monasteries,” Moscow-based Transneft said in a document dated March 16 and filed as part of the company’s appeal against a ruling requiring it to release board minutes.

Given that Transneft is one of the most corrupt companies in the galaxy, I’m guessing that the widows, orphans, and monks who are getting the cash not going to shareholders have numbered Swiss accounts, and are driven to and from vulgarly luxurious dachas in gated communities in black Mercedes with flashing blue lights, chauffeured by neckless men in black turtlenecks.

I do have to give them credit for chutzpah, though.  The thought of Transneft’s management’s tender spot for widows and churches brings to mind Nathan Detroit and his gang visiting the Save-a-Soul Mission in Guys and Dolls.

In other Russian oil transportation news, Transneft has announced that it plans to sue the Chinese oil company CNPC for underpayment on oil shipments made over the new Russia-China pipeline.  Back in 2009, at the depths of the financial crisis when Russia and China negotiated the financing for the pipeline and prices on terms that were very favorable to China, I predicted that there would be contractual disputes when prices turned around.  Could this be the first inkling of the accuracy of that forecast?  The reporting is currently too thin to tell.

That’s not surprising since Transneft, hardly a paragon of transparency (indeed, it’s the poster child for opacity), is the only source of information.  This bears some watching going forward.

Print Friendly, PDF & Email


  1. Gosh, now that sure is a poser, because I was sure that in the paradise that is Putin’s Russia there was more than enough prosperity to reward both owners and widows/orphans. Are they really admitting, even though oil prices are soaring, and even in an election cycle, that this isn’t so? Clearly a bunch of treacherous Russophobes there, Grandfather Putin must deal sternly with them, in the best interests of Mother Russia.

    Comment by La Russophobe — April 20, 2011 @ 8:17 pm

  2. To the Tune of Heart of Gold by Neil Young, a ballad to Transneft-

    I wanna live
    I wanna give
    I’ve been a pipeliner
    With a heart of gold
    It’s to the poor ones
    I always give
    That keeps me pumping
    With a heart of gold
    When the oil is sold

    I’ve been to Ventspils
    I’ve dealt with oil spills
    I crossed the country
    With a heart of gold
    I’ve been a gold mine
    And such a fine mine
    That keeps me pumping
    With a heart of gold
    When the oil is sold
    And do what I’m told
    Keeps me pumping
    With a heart of gold
    And do what I’m told

    Comment by pahoben — April 20, 2011 @ 9:59 pm

RSS feed for comments on this post. TrackBack URI

Leave a comment

Powered by WordPress