Rosneft Oil Co. and Morgan Stanley have signed a binding
agreement allowing Rosneft to purchase the global oil
merchanting unit of Morgan Stanleys commodities division.
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 US, UK and Singapore (approximately
one-third of Morgan Stanleys total commodities
merchanting personnel) along with 180 mid- and back-office
executives will become part of Rosneft as part of the
transaction. The transfer of all supporting systems and
processes is an integral part of the agreement. This includes a
first in class approach towards managing market risk, trading
controls and adhering to regulatory compliance.
Morgan Stanleys non-controlling 49% stake in Heidmar
Holdings, which manages pools comprising a fleet of
approximately 100 independently owned commercial tankers, is
among the oil-related investments being transferred to Rosneft.
The transaction does not include Morgan Stanleys 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
The agreements reached today represent a breakthrough in
strengthening Rosnefts commerce and logistics unit, which
will spearhead the companys growth in the international
oil and products markets creating substantial incremental
synergies based on Rosnefts unique position as the
leading oil and gas company and Morgan Stanleys global
merchanting units geographical reach and depth of
supplier customer commercial relationships, said
Igor Sechin, Rosneft president and chairman of the management
board. The transaction will deliver increased value for
Rosnefts 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 is subject to, among other conditions,
regulatory approvals in the US, the European Union (EU) and
certain other jurisdictions. It is targeted to close in the
second half of 2014.