Empowering women in finance

PinkInvestments on Youtube Youtube     PinkInvestments on Facebook Facebook     

PinkInvestments on Twitter Twitter       PinkInvestments on LinkedIn LinkedIn

 Reports and Commentary from the Investment World

Reports and commentaries are posted here on a regular basis.




Tatneft ADR (TNT:NYSE) 2004-05-10

Profit from Oil & Gas deposits first discovered in 1637!

The oil & gas deposits of this company were first reported in military records going back to 1637. Then in the 18th Century there was an active search for Kazan oil. Peter the Great’s physician makes reference to it in 1718.

But the history of the oil industry of Tatarstan officially begins in 1943, the time, when an oil deposit of industrial importance was opened in Shugurovky region. It marked the beginning of an epoch of the great oil deposit discoveries in the republic.

The period that we are particularly interested in, as investors, is from 1996 to the present:

From December 1996 to March 1998. Tatneft became a pioneer among the Russian oil companies by introducing shares into the world markets of long-term capital.

From 1999 to 2003 Tatneft  bought controlling blocks of shares of OAO “Nizhnekamskshina”, OAO “Nizhnekamsk Carbon Black Plant” and related enterprises and outlined arrangements for the modernization of tire manufacturing within the presidential program of the development of oil-and-gas and petrochemical complex of the Republic of Tatarstan. The “Tatneft-Neftekhim” management company was founded for more effective implementation of the program, which got authority to manage nine enterprises included in the petrochemical complex of  Tatneft.

In 2003 the company started exploration operations in seven new areas of Tatarstan and the company finished the construction of 414 wells. Rejuvenation of the old well stock by means of sidetracking and horizontal sidetracking was implemented in 65 wells, and 64 of them have been put on production.

Today, the Group's principal activities are the exploration of crude oil and production of petroleum products. The Company is also involved in refining and marketing of crude oil and oil related products.

Refining and marketing accounts for 55% of revenues; exploration and production, 41% and petrochemical, 4%. At present Tatneft is developing 59 oil fields. Crude oil production is now at a level of 24.6 million tons. The oil company has 71 licenses, including 34 for oil production, 28 for geological studies and production, and 9 for geological studies for the purpose of prospecting and evaluation of hydrocarbon deposits in the Republic of Tatarstan, Chuvash Republic and the Ulyanovsk region.

On January 1, 2004 the operating well stock of OAO Tatneft  consisted of 21,530 wells. 430 wells were put on production after drilling, though only 379 wells had been planned. Average time of putting a well on production was 9 days!

This company goes from strength to strength and it will continue to increase its reserves and production activity over the next few years. In March 1998 Tatneft  was the only company in the Russian fuel and energy sector that was listed on the New York Stock Exchange and began regular share trading in the form of a second-level ADR. No Russian company, except Tatneft  was simultaneously represented at two of the most prestigious world stock exchanges in  London and New York .

Back in 1998 we felt that the Russian market was still too risky and too erratic to invest in. But now we feel the time is right to take a small exposure to this market, that has the potential for truly explosive growth. As the commodity boom gets well entrenched, Tatneft ADR’s are a great way to ride the wave to excellent profits.

Buy Tatneft ADR (TNT:NYSE) up to US$30 .


Disclaimer: All the information above is provided as a service for individuals and institutions. It should in no way be construed as a recommendation as an investment. Investment decisions should be based on the risk tolerance and planning horizon of the investor. Market participants must understand that past performance is also not a guarantee or predictor of future results.