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Investors Chronicle: SIBIR ENERGY (SBE): It hasn’t been easy for Sibir operating in Russia…

6 October 2006
 
It hasn’t been easy for Sibir operating in Russia over the years, but at least these numbers look healthy. In fact, Sibir’s management sees these results as: “A portrait of a company in transformation from an enterprise of promise into an enterprise of profit.” And despite the flowery language, there is some truth in the sentiment as, for the first time, all three of Sibir’s core businesses delivered profits at the operating level.

Production from the company’s Magma oilfields division contributed £9.4m, the refining business in Moscow contributed a further £16.3m, and the joint venture with Shell, SPD, turned profitable for the first time, too. However, there remains the ongoing argument with Sibneft to contend with, after Sibir found itself unexpectedly diluted out of a key asset last year. Sibir remains confident of a favourable outcome, but Sibneft has since been acquired by Gazprom, so it’s very much a case of David versus Goliath.

Still, with proved and probable reserves of more than 500m barrels of oil, Sibir’s not that small itself these days, especially in comparison with its Alternative Investment Market (Aim) peers.

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