5. Acquisitions and disposals of subsidiaries and non-controlling interests
Acquisition of Novy Port
On November 21, 2012 the Group acquired 90% shares of LLC Gazprom neft Novy Port (Novy Port) from JSC Gazprom. The acquired Company holds exploration and production licences for Novoportovskoe oil field. The transaction was treated as common control transaction and accounted for using predecessor accounting method.
The difference between the cash consideration paid of RUB 6.3 billion and the value of assets and liabilities acquired of RUB 4.9 billion was accounted for as additional paid-in-capital for the year ended December 31, 2012. The following tables present information of LLC Novy Port as of December 31, 2012 and as of acquisition date:
| December 31, 2012 | As of the acquisition date | |
|---|---|---|
Assets |
||
Current assets |
5,504 |
3,248 |
Property, plant and equipment, net |
4,046 |
2,910 |
Other non-current assets |
20 |
20 |
Total assets acquired |
9,570 |
6,178 |
Liabilities and shareholders’ equity |
||
Current liabilities |
4,180 |
761 |
Total liabilities assumed |
4,180 |
761 |
Equity attributable to the Company’s owners |
4,851 |
4,875 |
Non-controlling interest |
539 |
542 |
Total liabilities and shareholders’ equity |
9,570 |
6,178 |
Acquisition of Zhivoi Istok
In October 2012 the Group acquired 100% of LLC Zhivoi Istok for the amount of RUB 1,108 million, which holds licenses to explore and produce oil at the Baleykinsky field and to survey the Uranskaya acreage.
The following table present information of LLC Zhivoi Istok as of the acquisition date:
| As of the acquisition date | |
|---|---|
Assets |
|
Current assets |
15 |
Property, plant and equipment, net |
1,681 |
Other non-current assets |
1 |
Total assets acquired |
1,697 |
Liabilities and shareholders’ equity |
|
Current liabilities |
11 |
Other non-current liabilities |
578 |
Total liabilities assumed |
589 |
Total identifiable assets acquired and liabilities assumed |
1,108 |
Consideration paid |
(1,108) |
Goodwill |
— |
Acquisition of non-controlling interest in subsidiaries
In 2012 the Group has accounted for the acquisition of the additional interest in several subsidiaries where control is maintained in the amount of RUB 6.5 billion. As a result of these transactions the Group increased additional paid-in-capital by RUB 6.1 billion for the year ended December 31, 2012. This amount represents the excess of the carrying value of the investments acquired of RUB 12.6 billion over the consideration paid.
Acquisition of Orenburg assets
In the second half of 2011 the Group acquired three entities (100% of CJSC Centre of Science-Intensive Technologies, 87.5% of JSC Yuzhuralneftegaz and 61.8% of CJSC Gazprom Neft Orenburg) for the total consideration paid of RUB 17,786 million, which hold exploration and production licenses for the Eastern part of the Orenburg field, the Tsarichanskoye and the Kapitonovskoye fields with total proved reserves of 330 mboe. All together these three assets form a new production cluster in the Orenburg region.
The following table present information of business combination of CJSC Centre of Science-Intensive Technologies and JSC Yuzhuralneftegaz as of the acquisition date:
| As of the acquisition date | |
|---|---|
Assets |
|
Current assets |
482 |
Property, plant and equipment, net |
16,325 |
Other non-current assets |
1,375 |
Total assets acquired |
18,182 |
Liabilities and shareholders’ equity |
|
Current liabilities |
655 |
Other non-current liabilities |
3,203 |
Total liabilities assumed |
3,858 |
Total identifiable assets acquired and liabilities assumed |
14,324 |
Non-controlling interest |
(994) |
Consideration paid |
(13,330) |
Goodwill |
— |
The acquisition of CJSC Gazprom Neft Orenburg from JSC Gazprom (the parent company) was deemed to have occurred between entities under common control and therefore was accounted for using predecessor accounting method. The difference between the cash consideration paid of RUB 3.6 billion and the value of assets and liabilities acquired of RUB 4.7 billion was charged to additional paid-in-capital for the year ended December 31, 2011.
The following tables present information of CJSC Gazprom Neft Orenburg as of December 31, 2011 and as of acquisition date and for the periods before and after acquisition in 2011:
| December 31, 2011 | As of the acquisition date | |
|---|---|---|
Assets |
||
Current assets |
1,704 |
1,415 |
Property, plant and equipment, net |
14,666 |
14,692 |
Other non-current assets |
4 |
— |
Total assets acquired |
16,374 |
16,107 |
Liabilities and shareholders’ equity |
||
Current liabilities |
4,242 |
3,750 |
Non-current liabilities |
4,495 |
5,072 |
Total liabilities assumed |
8,737 |
8,822 |
Equity attributable to the Company’s owners |
4,720 |
4,502 |
Non-controlling interest |
2,917 |
2,783 |
Total liabilities and shareholders’ equity |
16,374 |
16,107 |
| For the period from the acquisition date to December 31, 2011 | For the period from January 1, 2011 to the acquisition date | |
|---|---|---|
Revenue from sales |
1,352 |
3,417 |
Depreciation, depletion and amortisation |
(176) |
(840) |
Other operating costs |
(842) |
(2,606) |
Total operating expenses |
(1,018) |
(3,446) |
Total other expenses |
(55) |
(116) |
Operating profit / (loss) |
279 |
(145) |
Profit before income tax |
224 |
(261) |
Total income tax expense / (benefit) |
(136) |
232 |
Profit for the period |
88 |
(29) |
Acquisition of non-controlling interest in NIS
On March 18, 2011 the Group finalized its offer made in January 2011 to buy out the free float shares in NIS (a maximum 19.12% of the NIS equity was available for purchase). Approximately 8.4 million NIS shares were submitted for purchase amounting to 5.15% of NIS authorized share capital. Based on the previously announced offer price the Group paid RUB 1.7 billion (US$ 58 million) for acquiring these shares increasing its interest in NIS from 51% to 56.15%.
The Group has accounted for the acquisition of the additional interest in NIS as an acquisition of non-controlling interest where control is maintained. As a result of the transaction the Group increased additional paid-in-capital by RUB 152 million for the year ended December 31, 2011. This amount represents the excess of the carrying value of the investments acquired of RUB 1.8 billion over the consideration paid.
Acquisition of non-controlling interest in Sibir Energy
On February 14, 2011 the Board of Directors of Sibir Energy adopted a resolution to reduce the share capital by 86.25 million shares (22.39%). Central Fuel Company, an affiliate to the Moscow Government, made a decision to withdraw membership in Sibir Energy for a compensation of RUB 21.6 billion. Starting from February 15, 2011 the Group has 100% interest in Sibir Energy.
As a result of the transaction the Group recognized an increase in additional paid-in-capital by RUB 616 million for the year ended December 31, 2011. The increase represents the excess of the carrying value of the investments acquired of RUB 22.3 billion over the consideration paid to Central Fuel Company.
Following the reduction in share capital of Sibir Energy, the Group has increased its effective interest in Moscow refinery from 69.02% to 77.72%. As a result of the increase in effective interest in Moscow refinery the Group recognized a credit of RUB 5.2 billion in additional paid-in-capital in shareholders’ equity for the year ended December 31, 2011.