Russian energy majors could take over shipyard project

The Zvezda shipyard has up to now been the responsibility of United Shipbuilding Corporation (USC). Work on the yard, intended to build ships up to 360m and 250,000dwt for Rosneft and Gazprom’s offshore projects, began in 2009. Continued delays to completion has sparked strong criticism from the Russian government. Currently, completion is 14 months behind schedule. Initially the 100 billion ruble ($3.3 billion) Zvezda yard was considered as a key project for USC.

The seriousness of the situation is reflected by the fact that in early August, Dmitry Rogozin, Russia’s deputy prime-minister, who is responsible for shipbuilding, requested the Prosecutor General’s Office to investigate the financial aspects of the project. Rogozin reports that the government is currently considering several options to establish the consortium.

There is a possibility that the established consortium may acquire the rights for Zvezda from USC and to continue building the yard itself. Rogozin says that in this case the repurchase price may be announced during the next 10-14 days. It is possible that USC may acquire a stake of up to 20% in the consortium.

Igor Sechin, head of Rosneft, has proposed that the consortium will include private investors, with responsibility for adoption of modern technologies and equipment. Rosneft will attract orders for the yard, while Gazprom’s financial arm, Gazprombank, will become another strategic partner. Because of the low technological capabilities of USC, there are doubts that the company would be able to complete Zvezda alongside its other projects.

Deputy Minister of Industry and Trade Alexey Rakhmanov, has announced pland to change the legal status of Bolshoy Kamen, where the new yard is located, in order to attract foreign investment. Russian analysts believe that involvement of outside investments could present Rosneft and the government with serious difficulties. According to Alexei Bezborodov, director general of Russian business paper InfraNews, shipbuilding is not regarded as a profitable industry. He says that the industry’s legal framework is unclear, with problems associated with patent rights and the workforce.

USC has declined to comment. Russian business paper Gazeta.ru cites its own sources in Zvezda as saying that Rosneft’s interest may spring from Roman Trocenko, former USC head and one of the main initiators of the Zvezda project, currently employed by Rosneft and wanting to regain control over the project.