Russian Oil Major Turns To Former Juice King To Boost Trade

Exclusive-Russia's Rosneft Aims for Big Boost in Oil Exports to China

A former Russian juice magnate who has crude terminals and other assets in the Caspian and Black Sea region says he is expanding cooperation with Kremlin-controlled Rosneft to help the oil major boost trading from Turkey to southern Europe.

Rosneft’s partnership with David Yakobashvili and his Petrocas oil products trading and logistics firm is part of efforts to build new markets as the Russian oil major grapples with U.S. and EU sanctions imposed in 2014 over Moscow’s activities in Ukraine.

Sanctions have stopped Rosneft, the world’s biggest listed oil company by output, working with Western banks and scuppered its bid to buy a trading unit from Morgan Stanley.

In response, Rosneft has built ties with global trading houses Trafigura and Glencore, as well as companies such as Petrocas that are based closer to home.

“We are pursuing joint strategic interests with Rosneft and are discussing joint involvement in infrastructure projects in the south Caucasus and beyond,” Yakobashvili told Reuters.

“Petrocas helps (Rosneft) increase margins when selling refined products and delivering them to end users in Europe and Turkey,” he said in an interview.

Born in the former Soviet Union’s republic of Georgia, Yakobashvili, 60, set up Petrocas in 2008 to supply Georgia and its neighbours with refined products. The initiative was part of an effort to diversify away from Russia.

In 2010, Yakobashvili divested from what had been his main asset, juice and dairy firm Wimm-Bill-Dann. PepsiCo bought a controlling stake in the company in 2010 in a deal valuing Wimm-Bill-Dann at more than $5 billion.

Petrocas, which controls oil terminals and gas stations in the Caucasus and Black Sea area, operated mostly as a logistics company until Rosneft acquired 49 percent in the firm in 2014 for $144 million.

“Petrocas has become a reliable partner to help solve logistical tasks in the Caspian Sea and the Caucasus,” Yakobashvili said, adding it was now seeking to expand trading operations in more southern European nations.

In 2014, Petrocas sold about 1 million tonnes of oil products per year. That had grown to 3.5 million tonnes in 2016.

Yakobashvili said this would expand this year as he targets markets in Greece, Italy, Bulgaria, Romania, Turkey and Germany. Petrocas was looking at starting crude oil trading and was talking to firms in Kazakhstan and Turkmenistan, he said.

Petrocas, which buys volumes from Rosneft at tenders, already has contracts with oil firms such as Kazakhstan’s Kazmunaigaz, Austria’s OMV, Greek Motor Oil Hellas, Italy’s Saras and France’s Total.

Turkey is a key growth market for Petrocas, which plans to ship 900,000 tonnes of diesel in 2017 to Turkey’s Demiroren Group under a long-term deal.
Source: Reuters (Reporting by Dmitry Zhdannikov, Olga Yagova; Editing by Edmund Blair)