Can't believe there's not a thread on these already. Well worth having in your portfolio surely.

An impressive breakout.
With small oil companies in focus - especially those with Eastern European exposure, SBE could run quickly to new highs.
This from the website:
"Sibir Energy plc is a UK independent oil and gas production company which listed on the Alternative Investment Market of the London Stock Exchange in 1997 (stock symbol: SBE). As of December 2003, on the basis of its market capitalisation of 297.33 million, Sibir is the 7th largest out of 754 AIM-listed companies.

Sibir has a pure Russian focus with 100% of its reserves and crude oil production coming from the oil-rich Khanty Mansiysk Region of Russian Western Siberia. As at 30 June 2003, Sibir's attributable oil and gas reserves amounted to 1.4 billion barrels.

Currently in production are Magma assets, Upper Salym and Priobskoye group of fields."

"From the beginning Sibir's strategy comprised five components:

To exploit the cheap oil in the ground opportunities existing in Russia


To achieve control over the assets underlying Sibir's Russian investments


To trade part of control over assets in return for the funding of the development of the majority of the assets on a non-recourse basis


To establish Sibir as the natural home for small to medium sized producers in Russia who have no future prospects


To structure Sibir as a unique and robust UK/Russian partnership which enables to access major expansion opportunities in Russia not otherwise available to UK investors
By 2000 strategies 1, 2 and 3 had been achieved and Sibir continues to look for opportunities. Strategy 4 is ongoing. Strategy 5 has been implemented and the results are evidenced by:

- agreement in principle to acquire a 25% interest in British Petroleum downstream network;
- participation in Moscow Oil Company. "

The chart broke out decisively last friday and today's price action implies that things could accelerate now with old highs of 47p being the first real level of resistance. Today's news from Cairn Energy will only add fuel to the fire as investors turn their attention to this sector. Along with JKX, SBE is a quality play with Russian exposure. DYOR as always.

Thank you

Thanks for that neilpos.

I've quite a bit invested in Sibir and I'm a bit concerned about this news - does anyone have any idea about how this may affect Sibir both the short and the long term?

No idea but I would like to know as well

Generally looking at comments on other BBs the concensus seems to be don't panic - and I would tend to agree - post from another BB below.

The CRUX = "clarification of certain arrangements relating
to the 50 per cent. interest in the Sibneft-Yugra joint venture of Moscow Oil
and Gas Company ("MOGC"). Sibir has a 45 per cent. interest in MOGC"


and refer to the Shares Mag comment "In the Russian oil world, nothing seems to proceed simply from A to B. Perhaps something to do with the Cyrillic alphabet.

The complexities mean there is still a good profit to be had from these shares because the profits will surprise the market when they start to flow this year. At its heart, Sibir is a clever way for Russian oligarch/entrepreneur Chalva Tchigirinski to swing deals without running foul of president Putin. Sibir has a 50:50 partnership with Shell in the huge Salym fields. In the even larger Priobskoye field, it is partnered less happily with Sibneft, the company founded by Chelseas Roman Abramovich.

Sibirs share of total proven and probable reserves is more than 1.4 billion barrels. Applying a price of $4 per barrel still suggests a net asset value which is 10 times the current price.

The joint venture with Shell has recently taken full control of the Salym fields. Previously, they were managed separately while Shell dithered over when to start drilling. Now the partners are committed to spending $1 billion. Sibir needs to negotiate project finance soon to fund its share of the bill.

Sibneft is spending $500 million developing Priobskoye. But Sibir complains it is being too secretive. It has passed the stake to a 50:50 joint venture with the Moscow city council and reckons the politicians will have more leverage with Sibneft.

The joint venture controls the refinery in Moscow and many of the petrol stations.

This year, it will push Sibirs attributable turnover above 150 million. By stages, the company is becoming an integrated oil business. Chalva Tchigirinski still controls 40% of the company,

but other notable backers include Nicholas Berrys Stancroft Trust with 5%. House broker Canaccord, which holds 6% of the total shares in issue, forecasts 2.8p EPS this year, up from an 0.3p loss in 2003. Full 2003 numbers are not expected until June.

Russia taxes its oil sector quite vigorously, but the companys profits are strongly geared to the rising price. Either way, the shares are starting to run as production ramps up at Salym.

It will peak at 120,000 barrels per day in 2009.

There appears to be some talk of an announcement later today or tomorrow.
I'm hoping that the shares were only suspended to prevent panic selling after the news about Yukos and once the position has been clarified the news from Sibir will not be negative (always living in hope).

Just read this elsewhere - maybe something good might come out of this.


The following is from an unamed source and maybe the root of the problem..it is not confirmed as fact.

Basically it evolves around Sibneft withholding information from the MOGC [or Sibir if you like] as is now apparent...and very briefly without boring you and go into details...

Previous production figures as submitted by Sibneft were leaked to be incorrect..

The fields being developed are now known to contain more than was previously thought and are producing more than has been admitted..Sibneft still meet their quota to the Moscow Oil refinery and the MOGC still get 50% of production..but the excess produced, which is alleged to be considerable, is quietly sifted away and shipped to Sibnefts own refinery in Omsk.

That post was on ADVFN - I think that we are heading for a big bust up and who comes out best I'm not entirely sure - can only wait for the announcement now and cross fingers.

Seems to be more people posting positive comments on other BBs - lets hope for an update shortly.

oneill,
For this share - advfn & ample.
Must give news soon.

Anything that shares or IC suggests is usually crap. I had my fingers burned years ago by buying a tip from these mags and it went bankrupt!!!!!!!!

As usual GF, u ask questions about Shell or Russiaj venture. Well i'm in the oil business and Russia is high risk job after studying the country. And Putin is ramping up taxation lots too for the companies there so there is going to be litle growth from that expected just a few months ago.

As for Shell............well dont make me laugh. They dont know there arse from their elbow

i too have a holding in this company!only find out about it today has i have been away,i thought that this stock was going somewhere????????????????/

But still lots of positive thinkers on other boards - talks of buyouts of Sibneft and all sorts of things - should be interesting when news does come out - not a lot to do until then.

Extract from the Guardian today - Sibir are obviously caught in the middle of all this, let's hope that they are brokering a good deal for us!!!

Banks have warned Russian oil group Yukos that it is at risk of defaulting on a $1bn (560m) loan if it is forced to comply with an order from the tax authorities for $3.5bn.
The crisis could play into the hands of Chelsea football club owner Roman Abramovich, who has been trying to unwind a merger between his Sibneft oil firm and Yukos.

Shares in Yukos fell 10% to 320.1 roubles in Moscow following the concerns expressed by Citibank, Deutsche Bank and HSBC.

Standard & Poor's agency earlier slashed its rating on Yukos but a spokesman from the company tried to steady market nerves.

"This notice does not mean that the banks demand an early loan redemption or want to freeze our accounts," said Alexander Shadrin.

This morning Bruce Misamore, the Yukos finance director, is in London to persuade western investors that his firm will be able to successfully fight the claim from the Russian authorities.

Some analysts say the charge for unpaid taxes, surcharges and fines could bankrupt the group, but Yukos has argued it is "illegal and unfounded".

Meanwhile Yukos dismissed speculation that Mr Abramovich could be in discussions about the sale of a 25% stake in the Sibneft oil company he used to control to Total of France.

"There cannot be talk about a disposal because you cannot sell something you don't own," said a Yukos spokeswoman in London.

Yukos purchased a 92% stake in Sibneft in 2003 but Mr Abramovich has been trying to unwind the deal because of problems that have since troubled Yukos.

The most serious of these has been the imprisonment on fraud charges of its former chief executive, Mikhail Khodorkovsky.

The Financial Times reported yesterday that Total had won backing from the Kremlin to buy a quarter of Sibneft in a deal that would be worth $4bn.

But a number of American firms - including ChevronTexaco and ExxonMobil - are known to be keen to buy a holding in Sibneft, as is Shell.

Total and Sibneft refused to comment yesterday.

The future of the $11bn merger between Yukos and Sibneft could depend on the outcome of a Moscow court hearing tomorrow into the validity of a new share issue with which Yukos has partly paid for Sibneft.

There is also a Yukos board meeting at which Sibneft supporters could put forward new proposals for splitting the companies' merger.

....and from the FT

Total, the French oil company, has won preliminary backing from the Kremlin to take a 25 per cent stake in Sibneft, one of Russia's biggest oil companies.


If Moscow maintains its position, Total will edge out ChevronTexaco and ExxonMobil of the US, and Royal Dutch/Shell, the Anglo-Dutch energy group, in securing the second large corporate partnership in one of the most promising oil frontiers. BP struck the first big international energy partnership in Russia in a deal with TNK last year.

Initial reaction by Washington was anger.

"Those in the US administration who have heard this are extremely annoyed," said a Washington attorney specialising in international oil transactions. "This could harm the relationship between France and the US. It would be a good idea for Total to come to Washington as this is seen as the French government and French companies going behind the back of the US because it is clear US companies also want to do this deal."

Bankers said that Chevron-Texaco, the second-largest US energy group, was continuing to pursue a deal with Sibneft.

The administration of George W. Bush, US president, has been particularly active in trying to secure Russian oil as a strategic alternative to its Middle East suppliers.

People close to the two companies said Total was seeking a 25 per cent stake, plus one voting share of Sibneft. One banker said a 25 per cent holding of Sibneft was worth about $4bn and would fit in with the company's spending plans.

Roman Abramovich, who controls Sibneft and is one of Russia's most politically connected oligarchs, has been looking for a foreign buyer for a stake in the company following his decision to unwind the merger with Yukos, the Russian oil company.

One prominent business figure in Moscow and a Washington insider said a potential deal with Total had received an approving nod from the Kremlin.

But people following the discussions warn that they are not yet in their final stages and no formal deal was likely until Sibneft had been demerged from Yukos. A spokesman for Sibneft said: "We do not comment on market rumours. Our focus is on the demerger."

Because of Sibir's stake in MOGC & hence the link with Sibneft - see below.

MOGC
In terms of the final agreement between Sibir and the City, 55% of the shares in MOGC have been issued to the City with the remaining 45% issued to Sibir. The total contributions in kind made by Sibir and the City are described below. These were valued at $172 million and $222 million respectively. Voting as between Sibir and the City is shared 50:50. Yuri Mikhailivitch Lushkov the prominent and influential Mayor of Moscow is Chairman and Chalva Pavlovitch Tchigirinski, a Director and significant investor in Sibir, has been appointed Chief Executive of MOGC for the next 5 years.

The City of Moscow’s contributions in kind comprise the following:

38% (a controlling interest by virtue of the share classification) of MNPZ the company which owns the Moscow refinery. Annual refining capacity at the refinery is approximately 10 million tonnes or 73 million barrels.
38% (a controlling interest by virtue of the share classification) of Moctneftproduct (MNP). Assets of MNP include 17 distribution depots and an aggregate oil storage capacity of 267,000 cubic meters which represents 75% of Moscow’s and Moscow Region’s total storage capacity for oil products. Assets also include 69 gasoline stations, mainly in Moscow region.
100% of Moscow Fuel Company which owns 88 gasoline stations in Moscow City and one large terminal situated close to a main airport and the national water way network. It is also linked to Moscow refinery by rail and pipeline.
Sibir’s contributions in kind comprise the transfer of control of the interest in the holding company of Sibir’s subsidiary Ugraneft which in turn holds 50% of Sibneft-Yugra the licence holder of the South Priobskoye and East Palyanovskoye fields in Western Siberia. The total proven and probable reserves for these fields according to Russian Federal State Committee of Reserves classification are in excess of 1.5 billion barrels of oil. MOGC will now assume responsibility for obtaining the operational and financial data which Sibir has been unable to obtain from Sibneft-Yugra as reported to you in our last report. Given that the Board comprises prominent Russians we are confident that the missing information will be forthcoming soon.

As a shareholder of MOGC, Sibir will participate in the 50% entitlement of MOGC to supply the Moscow refinery. Refinery access has become an increasingly important factor in operating in Russia in view of the pipeline export capacity constraints which limit exports to approximately one third of production. In addition, recent overall increases in Russian production have increased the competition for pipeline access. As domestic crude sales are sold, most of the time, at a net back price well below the equivalent export price, it is important to have a way of adding value to Sibir’s non-exported sales. Sibir will do so by refining non-exported product through Moscow refinery, and sell the resultant refined product by way of export (not affected by the above mentioned pipeline constraints) or through MOGC’s large retail network, or to other customers such as power generation stations in the case of heating oil. Through this integrated network Sibir will optimise the value of its production.

Surely Yuri Mik... in looking after his own interests will also be indirectly looking us other Sibir investors??? This has to be some good news???

From the independent today.......

UK oil firm faces 100m hit as Abramovich deal turns sour
By Michael Jivkov
29 April 2004


Sibir Energy, the AIM-listed oil group, is facing a possible 100m write-down after a Russian joint venture with Roman Abramovich's Sibneft oil giant turned sour. The venture, called Sibneft-Yugra, was established in 2000 to explore oil reserves of the Priobskoye field in Siberia and it accounts for about 20 per cent of Sibir's total assets.

According to City sources, Sibir's 22.5 per cent holding in the venture has been "significantly diluted" by the mysterious issue of new shares. As a result of this move, Sibir now finds itself with a tiny shareholding - some say less than 1 per cent - in Sibneft-Yugra and financial sources claim it has been left out of pocket.

Last week, Sibir asked for its shares to be suspended from trading on the London stock market,"pending clarification of certain arrangements" relating to its interest in the Sibneft-Yugra joint venture. The shares were suspended at 28p, valuing the group at 489m.

It is thought that a shocked Sibir only found out about the change in the ownership structure a couple of weeks ago. The news will also raise questions about the level of controls that Sibir had put in place to manage the venture, oil industry experts said.

Sibir is believed to be trying to speak to its major shareholders before issuing a further statement and resuming trading in the shares. Shareholders include Nicholas Berry, a member of the family that used to own The Daily Telegraph.

Henry Cameron, the chief executive of Sibir, said: "The shares have been suspended to avoid a potential false market. We've agreed with the market authorities that we will make a full clarificatory statement as soon as we are in a position to do so. Everyone here is working flat out to achieve a satisfactory outcome and an end to the uncertainty."

He declined to detail the exact nature of the problem or its implications for Sibir shareholders.

Sibir owns its stake in Sibneft-Yugra via its shareholding in Moscow Oil & Gas Company (MOGC), which owns 50 per cent of Sibneft-Yugra. Sibir owns 45 per cent of MOGC, while the remaining 55 per cent is held by the Moscow city government, which also seems to have been disenfranchised as a result of the change in the shareholding structure.

Although Sibneft is controlled by Mr Abramovich, the owner of Chelsea Football Club, it is not clear whether he has personally been made aware of the nature of the dispute, which might end up in the Russian courts. Mr Abramovich is thought to be keen to sell a stake in his Sibneft group to an international oil company and may not welcome any adverse publicity from a dispute with Sibir, analysts said.

Sibneft's spokesman John Mann said yesterday: "Sibneft's shareholding in the Sibneft-Yugra joint venture was and remains 50 per cent as will be disclosed in the company's next quarterly report." Mr Mann declined to say who owns the other 50 per cent of the business. "You'll have to ask Sibir," he said.

Sibir has been in conflict with Sibneft for some time over the joint venture. As long ago as the 2002/03 annual report, Sibir warned its shareholders that it was having to revise the way it treated Sibneft-Yugra in accounting terms. Sibir complained that Sibneft was refusing to supply any operational or financial information to its partners.

One oil analyst in London said: "The implications of this are a bit broader than just Sibir. Over the last few years, more confidence has grown about doing business in Russia. People will be surprised that this sort of thing still goes on in Russia."

Sibir has reserves equal to 713 million barrels of oil; in 2003, it was producing 4,778 barrels a day. It is forecasting production of 6,380 barrels per day this year, rising to 12,258 next year and 53,550 barrels per day in 2006.

Its stated strategy is to structure itself as a "unique and robust Russo-Western partnership" to take advantage of major opportunities in Russia not available to Western investors. It has partnerships with BP and Shell.

My bet is it will return at 50% of suspension price (regretably)

this on basis that THEY have been fully stuffed by the Russians

if situation is not as bad as would currently appear then somewhere over the 14p mark depending.....

so much for my daughter being a good catch!

rgds

I struggle to understand how they could dilute the shareholding without the other partners knowing, especially the Moscow City Government. I can't see them lying down without an almighty fight.
One thing is for certain, I definately won't be cheering Chelsea on in the future.

I'm done with speculation on this one - just checking the RNS each day - not worth worrying about as there is not alot one can do.