Barclays Capital is expanding in Russia as state companies raise multi-billion-dollar loans to finance acquisitions and pipelines, Chairman Hans-Joerg Rudloff told Reuters. Rudloff, chairman of the investment-banking arm of Barclays Plc, said major deals could feature borrowing by Transneft and Gazprom to build oil and gas pipelines.
State oil company Rosneft, Barclays' biggest Russian client, will hold a staggered initial public offering from the start of 2006 and a bond issue is likely, Rudloff said, valuing Rosneft at $30 billion.
"There are huge projects in the pipeline," he said in an interview. "Russia is a very important market for us and we will expand in all areas here."
Barclays Capital, with a balance sheet of 560 billion pounds ($992.9 billion), is one of the major players in Russia's swiftly growing debt markets as the Kremlin tightens its control over the oil industry and a credit boom drives consumption.
He refused to discuss his meetings in Moscow, where he spends two days a month, but said this year was the best ever for Barclays in Russia. Barclays Capital could open an office in Moscow but deals would still be done through London, he said.
"There are so many deals in the pipeline you just have no idea, the biggest ones are the pipelines, Transneft, Gazprom all of this is big stuff," he said.
"Our relationship with Gazprom is just being built. Will we do a transaction one day with Gazprom? I am sure we will."
More than half of Barclays' lending this year was to Rosneft, which last year acquired control of Yugansk, the core asset of fallen oil major YUKOS auctioned by the state to recover massive back taxes.
Rudloff brushed aside any concerns about threats from YUKOS shareholder Group Menatep, which has said Yugansk was stolen.
Barclays arranged a $2 billion loan with ABN Amro secured on Rosneft's export receipts and won a mandate with four other banks for a $7.5 billion syndicated loan to Rosneftegaz.
That loan is to finance the Russian government's purchase of a 10.7 percent stake in Gazprom to give the state control of the gas giant, a key precursor to removal of restrictions on foreign ownership of Gazprom shares.
The $7.5 billion loan was "all done", Rudloff said. The money will be disbursed to Rosneftegaz, a state-owned special purpose vehicle, and repaid from proceeds of a Rosneft IPO.
He said his close relationship with Sergei Bogdanchikov, president of Rosneft, had helped him. They met in the early 1990s in the Russian Far East, where Bogdanchikov was working.
When asked if he expected any more big Rosneft deals, he said: "It depends on their acquisition policy, anything can happen but perhaps not right now."
"Bogdanchikov is an oil man - he comes from the field and he knows his business inside out," Rudloff said. "I would listen to his forecasts."