“Geotech” has scouted out an investor

According to Kommersant’s data, Gazprombank structures became the owner of one of the largest Russian seismic companies Geotech instead of Trust Bank. “Trust” decided to leave it ahead of schedule against the backdrop of a reduction in investment in exploration. The asset will be managed by management close to the ex-head of Rosgeo, and now the first vice president of Gazprombank, Roman Panov. According to experts, the bank, which already has experience in working with oilfield services assets, could improve the efficiency of Geotek with the help of new orders and investments.

Trust Bank sold the Geotech seismic company to Gazprombank structures, several Kommersant sources in the oil industry told Kommersant. On December 14, the head of Trust, Alexander Sokolov, spoke about the fact of the sale in an interview with Vedomosti, explaining the urgent need for a deal by reducing investment in exploration, although “the asset was planned to be sold in 2026.” “Fortunately, we managed to find a high-quality profile investor who has enough financial and industry resources to both keep and develop the company,” he said, without specifying to whom the asset was sold. “Trust” acquired “Geotech” for 4.9 billion rubles. at FC Otkritie at the end of 2020.

The deal could take place at the end of September. Then the powers of the board of directors of Geotek were terminated ahead of schedule and a major transaction of the Trust was reported in the form of an “agreement on making a contribution to the property of Geotek on essential terms”. Since October, Geotek has been headed by Sergey Suchkov, the former first deputy head of Rosgeologiya. Mr. Suchkov joined Rosgeologiya in 2014, when the state company was headed by Roman Panov, both top managers left the company in 2019 amid a scandal with Ruslan Gorring, deputy head of Rosgeo. In the same year, Mr. Panov became the first vice president of Gazprombank, and, according to Kommersant’s interlocutors, it will be he who will oversee the work of Geotek, given the experience of managing Rosgeologiya. Trust declined to comment, Gazprombank did not respond to Kommersant.

At first glance, Gazprombank’s interest in an asset with a difficult financial situation against the backdrop of uncertainty in the industry looks strange, Kommersant’s interlocutors say. But, according to one of Kommersant’s sources, Trust probably “dumped the troubled asset or sold it at the lowest price.” He notes that the bank can help Geoteka with an increase in orders and optimization of business processes, and then sell it. According to SPARK, Geotek’s revenue for 2021 according to RAS is 9.5 billion rubles. The company received a loss of 426 million rubles. At the same time, it has a high level of debt burden: at the end of the first quarter, the debt was about 22 billion rubles.

For Gazprombank, Geotech may be of interest “both from the point of view of business development and repackaging for sale,” says Dmitry Kasatkin, an independent expert. Gazprombank has significant competencies in the field of geological exploration, major initiatives in this area, direct access to major oil companies, as well as its own oilfield service assets. The seismic market is in the zone of low profitability and shrinking in volume, but the need to replenish reserves guarantees demand at least in the long term, he said. “The trend towards the entry of state and quasi-state companies into business will further intensify in all sectors,” Mr. Kasatkin believes.

The seismic market, like other oilfield service industries, experienced the deepest drop in 2014-2015, falling by almost 40%, estimates Nikita Zotov from Vygon Consulting. After that, the largest market players significantly increased their efficiency, and by 2021 the market volume was about 50 billion rubles. According to Vygon Consulting forecasts, on the horizon until 2025, a drop of 10% relative to 2021 is possible, but it does not seem so catastrophic, as companies are actively investing in the development of new projects in Eastern Siberia, focused on Asian markets, and are engaged in additional exploration in developed fields.

Dmitry Kozlov