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Advance Capital is pleased to announce the acquisition by Zarubezhneft Group of a 56% stake in UNGP from the Non-Core Assets Bank TRUST. The deal represents a logical continuation of the Memorandum of Strategic Partnership for the project signed by the parties at the St. Petersburg International Economic Forum in 2019.

Zarubezhneft is a Russian oil and gas company of strategic importance with a strong history and over 50 years of unique experience in international operations. Its key projects include offshore operations in Vietnam through the Vietsovpetro joint venture, development of fields in the Nenets Autonomous Okrug via the RUSVIETPETRO joint company and the PSA at the Kharyaga field, application of technologies in field development in Cuba, as well as refining and marketing activities in the Republic of Srpska (Bosnia and Herzegovina).

The Non-Core Assets Bank TRUST is a Russian financial institution with majority state ownership, established as part of the Central Bank of the Russian Federation’s banking sector resolution program. The bank was formed in July 2018 on the basis of National Bank TRUST through the consolidation of non-core assets of rehabilitated financial institutions. Its activities are focused on effective asset management, value enhancement, and subsequent divestment.

UNGP owns three gas condensate fields in the south of the Orenburg region—Kopanskoye, Chkalovskoye, and Berdyanskoye—as well as a developed gas infrastructure. In 2019, the company produced 238 million cubic meters of gas and 44 thousand tonnes of oil and condensate.

The acquisition of UNGP is driven by Zarubezhneft Group’s strategy to expand its resource base and strengthen its expertise in the gas sector. The asset is expected to be used as a platform for the development and testing of solutions with subsequent application to international assets, as well as a base for professional talent development.

Sergey Kudryashov, Chief Executive Officer at Zarubezhneft:

“The acquisition of the asset from TRUST is a new experience for us and an important step both in terms of expanding our gas business and developing innovative technologies at assets located in the Russian Federation.”

Alexander Sokolov, President and Chairman of the Management Board of Bank TRUST:

“This is the first oil and gas deal for the non-core assets bank. Our objective was not only to divest the company, but also to identify a strategic investor capable of developing the asset further.”

Karen Dashyan, Partner and Managing Director at Advance Capital:

“The acquisition of UNGP is a logical decision for Zarubezhneft within its strategy to develop gas and condensate production and sales in the region of presence. The asset has the necessary gas infrastructure and can serve as a platform for consolidating other regional assets.”

Alexey Pigarev, Partner and Executive Director at Advance Capital:

“This deal became one of the longest in Advance Capital’s history: during the course of our work, UNGP went through several owners, changes in seller-side project teams, and even revisions to the deal structure. Nevertheless, this did not prevent us from achieving the key objective—acquiring a high-quality gas asset on the most favorable terms for the client. Thanks to professional advisory support and a well-structured negotiation process, the deal price was significantly reduced.”

Advance Capital acted as the exclusive financial advisor to Zarubezhneft.

The deal value is not disclosed.