OAO Rosneft fell the most in more than two weeks as plans to build a refinery spurred concern profit at Russia’s largest oil producer may suffer from capital expense.
The stock declined 1.5 percent to 204.39 rubles by the close in Moscow, the most since June 5.
Rosneft yesterday agreed to borrow as much as 100 billion rubles ($3 billion) for five years from VTB Group for the refinery near Moscow and is looking to develop projects with Eni SpA and Statoil ASA. The refinery’s cost projection is more than $7 billion and its capacity will be as much as 12 million metric tons a year, Sergei Shoigu, the regional governor, said at the St. Petersburg International Economic Forum yesterday.
“We see the news as negative for Rosneft,” UralSib Capital analysts led by Alexei Kokin said in an e-mailed note. “The company’s investment decisions are based on government priorities rather than on maximization of shareholder value, which thus create significant overinvestment risks.”
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