LONDON, UK: PetroNeft Resources PLC, the oil and gas exploration company focused on Russia, has announced that it has entered into a non-binding conditional agreement to sell its entire interests in WorldAce Investments Limited and OOO Granite Construction to its CEO and Executive Director Pavel Tetyakov for a nominal consideration of RUR10,000 (approximately USD110).
The agreement is in addition to the deal that was signed in June to sell its entire interest in Lineynoye LLC, which holds Licence 67, to Tetyakov for RUB210 million (US$2.56 million).
The proposed disposals are subject to the execution of formal binding sales and purchase agreements, as well as approval of independent shareholders of the Company and all applicable corporate and government approvals. The proposed disposals would also be classified as a related party transaction for PetroNeft under AIM and Euronext Growth Rules.
The completion of the sale of the Company’s interest in these entities would mark the Company’s full exit from the Russian market, where it has faced increasing challenges due to the Ukraine war and a long-running dispute with the pipeline operator Nord Imperial. The Company’s joint venture partner in Licence 61, Oil India International B.V., has rejected Tetyakov’s offer to buy out their interest or sell their own interest to him. Oil India has rights of first refusal and tag along rights, which expire on 30 August 2023.
WorldAce Investments Limited is a 50/50 joint venture company with Oil India that owns 100% in Stimul-T LLP, which operates Licence 61. OOO Granite Construction is a Russian subsidiary of PetroNeft that was set up to manage small scale infield construction projects for Licence 61. Both Stimul-T and Granite Construction have ceased operations and filed for bankruptcy administration in Russia due to their inability to serve their considerable debts to third parties, which are now in excess of US$11 million.