Rosneftegaz and the Role of Government Ownership

Rosneftegaz is a Russian state-owned company that plays a crucial role in the country's energy sector. Its main function is to manage the state's stake in Rosneft, the country's largest oil producer.

The Russian government owns a majority stake in Rosneftegaz, which gives the government significant control over the company's operations. This control is exercised through the Russian Ministry of Energy and the Russian Ministry of Finance.

Rosneftegaz was established in 2004 to consolidate the state's oil and gas assets. This consolidation allowed the government to better manage its interests in the energy sector.

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Rosneftegaz transferred 50.2 billion rubles, or $1.6 billion, to the government's coffers to recapitalize hydropower monopoly RusHydro.

This money will be used to finance construction projects in the Far East, specifically in Sovetskaya Gavan, Sakhalin, Yakutsk, and Blagoveshchensk, as identified by President Vladimir Putin in a decree signed on November 22.

The transfer occurred on December 5, but wasn't made public by Rosneft until Friday, according to RIA-Novosti.

Rosneftegaz accumulated the money through dividend payments from its energy properties, including its 75 percent stake in Rosneft and 11 percent stake in Gazprom.

This is the latest twist in a high-profile turf war between Igor Sechin, the president of both Rosneft and Rosneftegaz, and Deputy Prime Minister Arkady Dvorkovich.

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The government is heavily involved in Rosneftegaz, with the Prime Minister's Cabinet seeking to extract $4.9 billion from the company.

The government's interest in Rosneftegaz's funds is driven by slowing economic growth and budget spending cuts. They're looking to tap into the company's coffers to help address these issues.

Rosneftegaz's balance sheet has accumulated billions of dollars from dividend payments and the sale of a stake in Rosneft to BP. This includes a 5.7 percent stake in Rosneft, which was sold as part of the $60 billion takeover of TNK-BP.

The government's goal is to force Rosneftegaz to pay up now, despite the company's plans to consolidate the power industry. This move is likely to be opposed by Igor Sechin, the influential head of both Rosneftegaz and Rosneft.

In the past, the government has successfully extracted money from Rosneftegaz, including a payment of 50.2 billion rubles ($1.58 billion) in 2012.

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