On December 20, 2013 a Russian 100% subsidiary of Rosneft Oil Company and Morgan Stanley signed a binding agreement to purchase the Global Oil Merchanting unit of Morgan Stanley Commodities division. Financial terms of the transaction were not disclosed.
The sale includes access to an international network of oil storages, crude oil and products inventories and related off-take and customer contracts, freight shipping agreements and equity investments into infrastructure, international marketing and research businesses. Approximately 100 front-office executives dedicated to oil and products merchanting in the U.S., U.K. and Singapore, or one-third of Morgan Stanley’s total commodities merchanting personnel, and approximately 180 mid- and back-office executives will become part of Rosneft group as part of the transaction. The transfer of all supporting systems and processes is an integral part of the agreement including a first in class approach towards managing market risk, trading controls and adhering to regulatory compliance.
The transaction does not include Morgan Stanley’s current client business related to oil and products merchanting, or its ownership stake in TransMontaigne, or any of its commodities operations outside of the oil and products sector.
Commenting on the transaction, Igor Sechin, Rosneft President and Chairman of the Management Board, said, ‘The agreements reached today represent a breakthrough in strengthening Rosneft’s Commerce and Logistics Unit, which will spearhead the Company’s growth in the international oil and products markets creating substantial incremental synergies based on Rosneft’s unique position as the leading oil and gas company and Morgan Stanley’s Global Merchanting Unit’s geographical reach and depth of “supplier – customer” commercial relationships. The transaction will deliver increased value for Rosneft’s equity barrels by going deeper into the merchanting value chain, while equally enhancing the visibility of global oil and products markets and opening up new revenue streams by accessing third party barrels.’
The transaction was approved by the Board of Directors of Rosneft Oil Company on 20 December 2013. The transaction is subject to, among other conditions, regulatory approvals in the U.S., the E.U. and certain other jurisdictions. It is targeted to close in the second half of 2014.
Notes for Editors
Rosneft is a Russian oil industry leader and the largest public oil and gas company in the world. Rosneft’s main operations are exploring for and producing oil and gas and producing and selling petroleum products and petrochemicals.
Rosneft is the world’s largest company by proved liquid hydrocarbon reserves as well as the undisputed leader by hydrocarbon resources among publicly traded oil and gas companies. For more information, please see www.rosneft.com.
Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management and wealth management services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 1,200 offices in 43 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.