Cablegate: Russia Energy: U/S Jeffery's Meeting with Rosneft

VZCZCXRO7792
PP RUEHAG RUEHAST RUEHDA RUEHDBU RUEHDF RUEHFL RUEHIK RUEHKW RUEHLA
RUEHLN RUEHLZ RUEHPOD RUEHROV RUEHSR RUEHVK RUEHYG
DE RUEHMO #3548 2010549
ZNR UUUUU ZZH
P 200549Z JUL 07
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 2226
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUEHBJ/AMEMBASSY BEIJING PRIORITY 4268
RHEHNSC/NSC WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHDC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY

UNCLAS MOSCOW 003548

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND GARVERICK,
OES MIOTKE AND COVINGTON, EAP YAMAMOTO, AND EEB SAEGER
DOE FOR HARBERT, HEGBORG, EKIMOFF
DOC FOR 4231/IEP/EUR/JBROUGHER
NSC FOR MCKIBBEN

E.O. 12958: N/A
TAGS: EPET ENRG ECON PREL RS
SUBJECT: RUSSIA ENERGY: U/S JEFFERY'S MEETING WITH ROSNEFT
VP PETER O'BRIEN

SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET DISTRIBUTION.

1. (SBU) During a brief meeting on July 18, Rosneft Vice
President for Finance and Investments Peter O'Brien (Amcit)
told U/S Jeffery that corporate governance at Rosneft and
other major Russian companies, while not yet up to Western
standards, has improved dramatically over the past several
years. O'Brien cited his and other companies' desire to
raise funds in international capital markets as the prime
driver of transparency. Regarding Rosneft's own unfulfilled
attempt to raise 5 billion Euros, O'Brien said that Rosneft
was not in a hurry and was unwilling to "pay any price," as
it has 18 months to refinance its debt. He said the timing
of the latest round of fundraising was "unlucky," explaining
that bond rates were rising as spreads were increasing,
causing diminished appetite for debt such as Rosneft's.

2. (SBU) O'Brien said the current Rosneft management team is
focused on efficiency and adopting best practices to optimize
the value of its current assets. Longer-term, the company
has ambitions of doing "big deals" using its own stock for
financing. He added that company leadership understands
"what needs to be done" to increase the value of the stock in
international markets, referring to improved management and
governance reforms.

THIS CABLE HAS BEEN CLEARED BY U/S JEFFERY.
BURNS

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