Russia merges two state shipping companies

President Vladimir Putin has signed a decree merging the country’s top energy shipping companies in a move to create a $5 billion national shipping giant and help develop the country’s huge offshore oil and gas projects.

Russia has been seeking to merge Sovcomflot and Novoship for several years, in line with the Kremlin’s strategy of enhancing control over the strategic energy sector by creating one large state giant which will rank among the world?s five top tanker companies.

State-owned Sovcomflot has a fleet operating 52 vessels with a total deadweight capacity of 4.16 million tonnes. Novoship, or Novorossiisk Shipping, in which Russia has a majority stake, has 60 vessels with a total deadweight capacity of around 3.7 million tonnes.

Sovcomflot already serves the ExxonMobil-led Sakhalin-1 offshore oil project and operates Rosneft’s Belokamenka floating storage facility near Murmansk. In January, the Rosneft and Sovcomflot set up a joint venture to serve Rosneft’s offshore projects.

The merger comes amid rumours that Russia would split the rights to develop new offshore oil and gas fields between Rosneft and Gazprom, further limiting the access of private and foreign firms to energy resources.