Tuesday 17 October 2017

PetroNeft shareholders vote to back $85m Oil India deal

An engineer works on a PetroNeft pipeline in Siberia.
An engineer works on a PetroNeft pipeline in Siberia.
Donal O'Donovan

Donal O'Donovan

PetroNeft shareholders have voted overwhelmingly in favour of an $85m (€62m) farm-out deal that will fund development of its most important oil prospect in Russia.

Shareholders voted 99pc to support the deal with Oil India Ltd at an extraordinary general meeting in Dublin on Friday.

The ballot was certain to be carried after PetroNeft's biggest shareholder, Natlata Partners, said it would support the deal. Natlata is controlled by Russian businessman Maxim Korobov.

Petroneft's Indian partners set shareholder approval as a condition of their involvement.

They also made rejection by shareholders of 15 proposals tabled by Natlata at a second EGM – held immediately after the farm-out vote – a condition of their investment.

Shareholders rejected each of the 15 Natlata proposals, which included removing and replacing five of PetroNeft's seven directors, voting roughly 75pc against and 25pc in favour.

Anger was voiced from the floor that shareholders could not vote out members of the board without risking the deal with Oil India. Chairman David Golders said the board had argued against Oil India's insistence on the clause.

Maxim Korobov told the Irish Independent that he intends to retain his stake in PetroNeft.

He supported the farm-out because the deal was "better than nothing given the condition of the company", he said.

The company has promised to bring wells into production, he said. However, if the situation at PetroNeft continues as it has been the share price will fall again. Natlata will increase its stake if that happens, boosting its ability to demand change, he said.

Following the meeting Petroneft chief executive Dennis Francis said the EGM and the Oil India deal mean a "new lease of life" for the company.

Irish Independent

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