RIYADH, 5 December 2007 — Gazprombank, a subsidiary of Russian energy giant Gazprom, said here yesterday it would definitely be interested in any Saudi initiative for exploring gas in the Red Sea.
Boris Ivanov, adviser to the chairman of Gazprombank, underlined his bank’s commitment at a press conference where he disclosed that two Russian investment funds in the energy and real estate sectors collectively worth $6 billion are targeting Saudi investors.
Anatoly Miliukov, executive vice president and head of asset management, Gazprombank, and Abdullah Zaid Al-Meleihi, chairman, Arabian Investors Group (AIG), were also present.
Asked about the prospect of Gazprombank investing in the Kingdom, he said “when Saudi Arabia floats a tender for gas exploration project concerning the Red Sea, we would definitely be participating in the project. We are also studying what we can do in collaboration with Saudi Aramco.”
Ivanov said the Russia Energy Fund and the Russia Real Estate Fund were valued at $5 billion and $1 billion respectively.
“We worked hard to launch these two funds which were facilitated by the good political relations between Russia and Saudi Arabia,” the executive said.
He added that Al-Meleihi had already committed $100 million to the Real Estate Fund, while others were also pitching in.
“There is a great deal of interest among Saudis. We have received various commitments that are being evaluated. We are also short-listing companies that will help us manage the fund,” the Gazprombank executive said.
As for the energy fund, he said the commitments from Saudi investors alone exceeded $ 1 billion, while Gazprombank would be the co-investor.
Anatoly Miliukov, executive vice president, said a noteworthy aspect of the Russian market was that it has remained immune to the fallout of the subprime crisis brewing in the US housing market and in Europe.
“Investors could expect attractive returns on real estate investments in Russia of 20-22 percent a year.”
He said that the strategy behind the launch of these two funds was to maximize returns on investments.
“Russian oil companies are dramatically undervalued compared to the energy market,” Miliukov said.
“Equity investments are also very attractive, given the fact that Gazprom is the largest oil company in the world. It is six times bigger than ExxonMobil. So we at Gazprombank will be co-investing in these funds,” he said.
Al-Meleihi told Arab News that besides committing $ 100 million to the Russia Real Estate Fund, he was also seeking investments in the energy fund.
In response to a question, he said Gazprombank would explore the possibility of establishing its presence in the Kingdom where, besides the oil and gas sector, there were tremendous opportunities in the light of the economic cities and other mega projects that had been launched or are in the pipeline.
He said AIG has been operating in the Kingdom for the last five years. “I have my own company, Al-Ramez International Group, which has been operating in the real estate sector since 1992.
However, AIG has been doing the business globally, especially in Russia, China, Singapore and Algeria in the energy and real estate sectors.
So far, we have invested over $3.5 billion in these areas in alliance with our partners from the GCC states,” Al-Meleihi further said, adding that AIG is also looking at the banking sector in China and possibly in India.
