Found to be true to his word is John Hess, CEO of the US-based oil company Hess Corporation, whom after considerable pressure , has announced that the company that his father founded will be selling off their Russian subsidiary Samara-Nafta, with $1.89 billion coming in the Hess bank account as their share of the proceeds.
/By Stanley Green /
Negotiations with Moscow based Lukoil Power company have apparently been continuing since November of last year, with the now completed deal meaning that the company will change hands for $2.1 billion. Hess’ partner in Samara-Nafta, Simon Kukes who held a 10% stake in the company will also be selling it to Lukoil, Russia’s second largest oil company
With their interests in Russian oil exploration considerably cut back, Hess will now turn his attentions to realizing some capital on assets held in Asia particularly some considerable oil fields that the company owns and in Indonesia and Thailand. Still up for sale are the fuel terminals, distribution and retail businesses owned by the Hess company, as well as their 50 per cent stake in energy trading firm Hetco.
John Hess has been under considerable pressure since January of this year when aggressive hedge fund Elliott Management, when after taking a nominal four per cent share in the company, began to relentlessly push for company reconstruction particularly regarding Hess’s unusually wide spread international operations.
In response to Elliott’s assertions John Hess announced last month his plans to cut back on the scale of the company‘s overseas operations and instead focusing on considerably fewer particularly the oil-rich North Dakotan Bakken shale fields, offshore drilling operations in the Gulf of Mexico, as well as oil fields in Ghana and Malaysia.
In 2013 alone, Hess Corporation has released $3.4 billion from sales of interests in Azerbaijan, the United Kingdom and the United States, with John Hess pointed out was part of a company’s short-term policy to transform itself into a more focused oil exploration and production company.
With the company’s annual meeting due to be held next month John Hess is obviously pulling out all the stops to reshape the company as quickly as possible, with Wall Street’s approval being shown by the fact that shares in the company having already risen by 39 per cent since the beginning of 2013, and jumping by 3% in a single day’s trading after the news of the potential sale to Lukoil Power.