Bashkiria has received unprecedented support in the form of stake in Bashneft - expert

UFA, 2 July 2015. /Bashinform News Agency, Galiya Nabieva/. Bashkortostan has obtained a bargaining chip to affect the Bashneft company activity in order to improve a socio-economic situation in the republic. Such an assessment of Bashneft’s preferred shares transfer in the republican property is given by the Director of the Institute of Economics Bashkir State University Rustem Akhunov.

Experts positively evaluate the transfer of shares in the ownership of the republic for several reasons. Firstly, Bashneft is a flagship of the economy and creates serious enough tax revenues to the budgetary system of the region. About half of the Ufa budget is formed from Bashneft revenues. Furthermore, in social terms it means thousands of jobs, and the importance of this asset is very high.

This year 20 billion of 65 billion rubles of net profit is directed to dividends payment. Bashkortostan receives 5 billion rubles at total 115 billion of budget revenues of the republic. This is a very serious replenishment, which will allow solving a number of financial problems related to the budget deficit.

According to experts the funds retained at the disposal of the enterprise are usually reinvested back into the business. Profits may be directed to the modernization of production facilities and other issues.

"This is such a good deal, good decision at the highest level that it cannot be named otherwise than a big win in respect of our republic”, the expert said. “Vladimir Putin thoroughly investigated into this situation and immediate responded to the request of the republican leadership to transfer a part of stake in Bashneft to the property of the republic.”

Reference. By the Decree of the President of Russia about 38 million ordinary shares and more than 6 million preferred shares of Bashneft were transferred to the ownership of the Republic of Bashkortostan. The cost of this stake today is close to 90 billion rubles. This allows Bashkortostan receiving dividends from the oil companies’ work. The amount of the dividend will be about 5 billion rubles this year.

PJSOC Bashneft is a vertically integrated company that operates in more than 20 regions of Russia and abroad. In 2014 the company ranked sixth in terms of oil production in Russia (17.8 million tons) and fourth in terms of crude oil refining among Russian oil companies (21.7 million tons). Bashneft accounts for 3.4 percent of total oil extraction and 7.6 percent of total oil refining in Russia. It has over 170 fields in commercial production.