| Type | Holding |
|---|---|
| Industry | Oil and gas industry |
| Founded | 1992 |
| Headquarters | Moscow, Russia |
| Key people | Igor Makarov (Chairman) Vladimir Makeev (General Director) |
| Products | Natural gas Petroleum |
| Services | Gas pipeline transport |
| Owner(s) | Private-owned |
| Website | iteragroup.com |
ITERA International Group of Companies is a Russia-based private-owned corporate group with headquarters in Moscow. Its core business primarily focuses on gas and gas processing. Along with gas, its numerous branches and subsidiaries also deal with energy, oil extraction, civil construction, pipeline and industrial engineering, coal mining, finance and insurance. ITERA is one of the key Russian independent producers and traders of natural gas operating mainly in Russia, the CIS countries and Turkmenistan. Its business activities also cover several countries in Europe, Asia, Africa and North America. As a whole, ITERA has over 150 branches, representative offices, branches, and affiliated companies all over the world.[1] Being a big independent player on the Russian gas market, ITERA closely teams up with the Russian gas giant Gazprom on developing infrastructure to deliver gas condensate from production sites.[2]
The company was originally started in the United States under the name Itera International Energy Corporation as a basic commodities trading company. In 1994, after a sale of sugar to the country of Turkmenistan, Itera obtained rights to sell Turkmeni natural gas as payment for its sugar transaction. Itera began sales to the Ukraine of the Turkmeni gas in 1995 and, based on that success, continued to expand its natural gas trading activities throughout the former Soviet Union, becoming the second largest seller of natural gas in the FSU in the late 1990s. Its subsidiary Itera USA provides representation for Itera Group projects in North America, with corporate headquarters in Jacksonville, Florida. Itera USA provides solutions in energy, bioenergy, timber and real estate. Itera USA is purportedly at work on a project that would use new, patented technology to produce bioethanol and other specialty chemicals.
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ITERA Group was established in 1992 as a trading company, and two years later it started implementing its own gas-relating and gas-supplying projects within its subsidiary ITERA Oil & Gas Company, LLC. In the 1990s that Company successfully delivered big amounts of natural gas from Central Asian producers (in particular, Turkmenistan) to CIS countries, like Ukraine, Belarus, Moldova, and Georgia, as well as to the Baltic States. Thus, it gained sound reputation of a stable and reliable gas supplier.[3] Up to date, gas production and distribution remains core corporate business. However, ITERA’s geographic priorities gradually switched to Russia. In the late 90s ITERA started gas business in Sverdlovsk Region, a big industrial center and one of the broadest local energy markets of Russia, and by now it became the sole gas supplier to the territory. ITERA actively penetrates into Moscow and Perm local markets as well.[4]
In 1998 the Company launched its own production of natural gas in Yamalo-Nenets Autonomous District in Western Siberia. ITERA was the first private company to put gas fields into operation in the Far North of Russia: Gubkinskoye gas field (reserves of 399 BCM) in 1999, a gas deposit (reserves are 407 BCM) of Vostochno-Tarkosalinskoye field in 2001), and Beregovoye gas field (reserves are 325 BCM) in 2003. So by now eight gas fields are being developed both in Yamalo-Nenets Autonomous District and Irkutsk Region. By 2011, the total of over 235 BCM of natural gas has been produced in those fields.[5] In the last few years the Company invested over $2 billion in new field development.[6]
Gas and oil is a substantial but not unique part of ITERA's business. Since the mid-2000s ITERA is being deeply involved in civil construction and industrial engineering. With its own capacities the Company successfully carried out and keeps implementing several big construction projects in Russia, Belarus and Turkmenistan. Among them are an Office Complex for an Organizing Committee of the Winter Olympic Games Sochi 2014, a skyscraper and a business center in Minsk, a big project of a country house settlement in Moscow Region, sport facilities and pipelines in Turkmenistan and Russia, and some others.[7] Electric power is becoming another promising area for ITERA business development. The Company commenced construction of a steam-gas power cogeneration plant with a capacity of 900 mW in Nizhny Novgorod Region. Thus, the Region will receive not only electric power it needs so badly, but also additional jobs. The Company’s upcoming plans also include construction (based on Danish technology) of a gas and petrochemical complex to produce 600 thousand tons of methanol a year in the Urals.[8]
Itera has secured a five-year syndicated loan worth $325 million, the company said on Monday. The loan, paying interest of three-month LIBOR plus 4.5 percent, will be used to refinance other loans. Deutsche Bank, Gazprombank, Raiffeisen Bank and UniCredit Bank make up the pool of lenders.[9]
Igor Viktorovich Makarov, Chairman of Board of Directors ITERA Oil and Gas Company Ltd. Born in Ashgabat (Turkmenistan) in 1962. Mr. Makarov graduated from Turkmen State University in 1983, and then served in the army. He was a member of the USSR national cycling team, champion and prizewinner of the all-Union (USSR) and international cycling competitions. Mr. Makarov is also a Master of Sports of International Class.[10] He started his business in the late 1980's and received excellent managing experience from a small production and trading company to a large international corporation. Mr. Makarov heads ITERA since its foundation in 1992. Being a successful businessman, Mr. Makarov preserved his young enthusiasm for professional sport. He actively supports and sponsors Russian national cycling movement. Thus, in mid-2010 he was elected as President of the Federation of Cycling Sport of Russia (FCSR)[11] and in March 2011 Makarov became a member of the Management Committee of the International Cycling Union, UCI. [12] He is decorated with state awards of different countries for significant contribution to developing economic relations and strengthening friendship and cooperation between the peoples. Among the awards are the Order of Friendship of Peoples and the Medal of Francisk Scorina (state awards of Belarus), the Friendship Medal (state award of Mongolia), the Order "Gloria Muncii" (Labor Glory) (the state award of the Republic of Moldova), as well as the Order of Holy Faithful Prince Daniel of Moscow and Innokenty the Sanctifier Metropolitan of Moscow and Kolomna, 3rd Class of the Russian Orthodox Church, the Order of Saint Sergius of Radonezh, 3rd Class of the Russian Orthodox Church, Honorary Reward "Аkinfy Nikitich Demidov" of the International Demidov's Foundation.[13]
Vladimir Makeev, General Director and Chairman of the Management Board of ITERA Oil and Gas Company, LLC. Vladimir Makeev was born in Moscow in 1948. He has started his working career in 1966 as an engineer at the Central Scientific Research Institute for Machine Building Technology with the Ministry of Energy, USSR. As of 1976 through 1981 he held executive positions at Proletarsky district CPSU committee of Moscow. As of 1981 he became a chief expert member of Tekhmashimport foreign trade association. In 1983 he became a chief expert of the USSR Trade Representation in Belgium. As of 1985 through 1991 he held executive positions in the Foreign Trade Ministry and Ministry of Foreign Economic Relations of the USSR. In 1991 he became a Deputy Trade Representative of the Russian Federation in the Republic of Cyprus. In 1993 he became a General Director of Mosnikos Investments Ltd. Investment Company. Starting in 1997 he became a Chief Executive Officer of Omrania Trading Ltd and ITERA International Energy L.L.C. In 2006 he was appointed a General Director and Chairman of the Management Board of ITERA Oil and Gas Company, LLC. In 1972 he graduated from All-Union Machine Building Institute, in 1983 he graduated from All-Union Academy of Foreign Trade. [14]
the Company increased the 2010 net profit under IAS by 42.7 percent up to US$ 226.9 million. Net sales amounted to US$ 1.6 billion compared to US$ 1.15 billion in the previous year, natural gas sales were RUR 1.58 billion (compared to RUR 1.13 billion in the previous year). The Company’s gross profit increased up to US$ 435.9 million from US$ 294 million in 2009, operating expenses amounted to US$ 151 million compared to US$ 145.8 million, operating profit increased up to US$ 285 million from US$ 148.6 million in the previous year. The Company’s profit before taxation reached US$ 270.18 million (US$ 199 million in 2009).[15]
Yamalo-Nenets Autonomous District is a major region for production activity of ITERA. The Company proceeded to implementation of natural gas production projects in Yamalo-Nenets Autonomous District in 1998. A year later, Gubkinskoe gas field was put into commercial operation and further on, after a year, a gas field of Vostochno-Tarkosalinskoye deposit was put into commercial service. In 2003, ITERA put into commercial operation Beregovoye gas field. ITERA International Group of Companies participates in commercial operation of gas fields and development of hydrocarbons fields in Yamalo-Nenets Autonomous District with the aggregate reserves of 510 billion cu m of gas, over 2 million tons of gas condensate and 7 million tons of oil. ITERA takes part in gasification of settlements and towns of Yamalo-Nenets Autonomous District, contributes to implementation of social programs in the District.[16]
Sverdlovsk Region ranks the 2nd industrial and 5th populous region in Russian Federation. That makes it one of the biggest and most attractive local gas markets in the country. ITERA has been operating in Sverdlovsk Region since 1999; at the moment the Company satisfies around 80% of regional needs in natural gas. The supplies are effected through ZAO Uralsevergaz, an ITERA subsidiary, in the amount of about 17 BCM a year. In 2003, ITERA and the Government of Sverdlovsk Region have concluded an agreement on cooperation for the period of 2004 through 2008, pursuant to which ITERA will deliver 88 BCM of gas to consumers of the Region for this period. In 2008 and 2011 this agreement was prolonged and vastly extended for further development of bilateral cooperation. According to 2011 agreement extension, ITERA and Uralsevergaz shall ensure construction of gas-boiler houses, connection gas pipelines between settlements and distribution gas pipelines in 2011 – 2015. This construction shall be accomplished in line with the Investment Program for 2011 – 2015 and the Master Plan for Gas Supply and Installation of Gas Service in Sverdlovsk Region. The Investment Plan covers 24 towns and municipalities. It envisions construction and reconstruction of 66 heat generators with a capacity of 260 mW including feeder gas pipelines with a length of about 21 km, as well as construction of about 81 km of distribution gas pipelines. The Investment Program implemented by ITERA Oil and Gas Company and CJSC Uralsevergaz and CJSC Regiongaz-invest (Regional Gas Investment), its subsidiary companies, is worth Rub. 1.62 billion. [17]
Itera's key capital assets are concentrated in Bratsk, a city northwards from Irkutsk, where Bratsk gas condensate field is located. The field is operated by the partnership Bratskekogaz formed by the city authorities and ITERA Oil & Gas Company, with stakes 21,1% and 78,9% respectively. The field’s proven reserves are estimated at a level of 10,7 billion cubic meters of gas and 820 thousand tons of condensate. Project output exceeds 400 million cubic meters.[18] The license for Bratskoe gas-condensate field is valid till December 31, 2039.[19]
Through its fully owned subsidiary Jupiter-A Company, ITERA Oil & Gas Company, LLC., owns a license to develop Tverdilovskoye field located in Orenburg Region. The field’s recoverable resources are estimated at 4470 thousand tons of oil and 580 million cu m of associated gas. A license for this field is valid till December 31, 2037.[20]
In the Region the Company is constructing of a steam-gas power cogeneration plant with a capacity of 900 mW in Nizhny Novgorod Region. The plant will produce electric power and also create additional jobs. [21]
The Malkinsky quarry, located in Stavropol Region, is amongst the largest quarries in Europe with production capacity exceeding 1 million cubic meters of crushed stone, sand, and gravel per year. The Open Joint Stock Company "Stavropolstroynerud", with a 72% share owned by ITERA, develops the quarry. Modern equipment and facilities of the industrial complex place Malkinsky quarry among the most advanced Russian enterprises of the construction industry.[22]
Since 2008 ITERA Group of Companies, through its subsidiary Arkticheskiye razrabotki, develops Apsatskoe mineral coal mine, one of the largest in Russia, in Zabaykalsky Krai. In mid-2010 the drilling process, aimed at prospect evaluation of potential reserves, has started. It is planned to finish undiscovered potential assessment in 2012, to enter its reserves in the state coal balance in 2016, and to start production of metallurgical coal in 2017, at the latest. The total expenditure on exploration is Rub. 700 million. Development of Apsatskoe coal mine is to boost local economy and provide necessary raw materials for metallurgical plants home and abroad. [23]
ITERA has been actively working with Turkmenistan since its foundation in 1992. Originally, bilateral cooperation exclusively concentrated on gas and energy sphere. In the 90s, being a major importer of Turkmen gas, the Company delivered hydrocarbons to other CIS consumers (like Ukraine and Belarus) covering a substantial part of their energy needs. In the 21st century the parties vastly diversified their projects and switched from gas trading in favor of industrial engineering, civil construction and oil and gas field exploration. In 2010 ITERA finished construction of Central Kara Kum – CS Yilanly gas pipeline 198.5 km length. This pipeline allows transporting up to three billion meters of natural gas a year to the CIS and world markets.[24] At present ITERA, together with Zarubezhneft, is carrying out a big joint project on developing hydrocarbons in the 21st block of the Turkmen sector in the Caspian Sea. The total expenditure of this project is estimated at USD 6 billion. According to the forecast, the reserves of this block are 219 million tons of oil, 100 billion cubic meters of natural gas and 92 billion of cubic meters of associated gas. ZARIT Project (the concern, which includes Zarubezhneft, Rosneft and ITERA) is also promising. It is to develop sea blocks 29-30-31 of the Turkmenistan sector of the Caspian Sea. ITERA contributes a lot to the social infrastructure of the country. Under its assistance, big sport and recreation facilities were constructed, in particular a ten-thousand-seat stadium in Turkmenabat[25], two large hippodromes in Lebap and Balkan velayats (provinces) of Turkmenistan[26] In the near future a comfortable hotel in Avaza recreation zone is due to be started. [27]
For many years Belarus remains a significant market for ITERA. The Company carries out a number of big infrastructure projects in the country. Among them are Minsk-City, a mega complex,[28] and a Business Center with Parus (a Sail) apartment skyscraper.[29]
ITERA has been actively working in the American market since 1992. Its individual branch, ITERA USA, headquarters in Jacksonville, and operates in Texas, Illinois, Pennsylvania, Alabama, North Carolina, Mississippi, Florida, Tennessee, and Louisiana[30] ITERA USA primarily focuses on oil and real estate along with renewable energy sources, chemicals and bioenergy technologies. The Company’s divisions also deal with building convenience stores and shopping centers throughout the USA. Since 2003 the Company has been producing and processing hydrocarbon raw material in Illinois and Texas; [31] in 2008 ITERA USA put into operation a bioethanol refinery in Pennsylvania. The construction of the same facility in Louisiana is planned as well.[32]
The Company expands its activity in other Trans-Caucasus Republics, and Armenia draws particular attention of ITERA. At present the Group examines a project of construction of a high-level sports center on the Lake Sevan, various investment opportunities in tourism, trade and sports, along with development of city infrastructure of Yerevan, Armenia’s capital. [33]
For several years ITERA Group of Companies operates in the Baltic gas market acting as a gas trader. Gas trade is carried out through its subsidiary firms and local gas companies. ITERA has full control over its subsidiary, ITERA Latvia (66% stake) [34], and also has a stake in Latviyas Gaze (16% through ITERA Latvia)[35] and in Estonian gas-trading company Eesti Gas (9,85%)[36]
The Company’s production projects allowed to create a few thousands of new jobs in Russia, Belarus and Georgia. ITERA is engaged in various charity activities facilitating social programs, education, culture and sports development. ITERA takes care of the environment. Gas production projects in the Far North of Russia are accompanied by nature protective measures to preserve and to protect the terrain, water basins, water bearing horizons and the atmosphere.
In order to coordinate charitable and sponsor activity of ITERA international group of companies, in April 2003 the Company Board of Directors made a decision to establish the Council on Charity and Sponsor Activities. The Council main tasks are:
Flight of Hope, an ecological project of ITERA International Group of Companies, is holder of a prestigious prize. A ceremony of prize distribution in the field of public relations PROBA-IPRA Golden World Awards – 2010 had taken place in the Hermitage Theatre in St. Petersburg on December 3. The second place in the Best Social PR Project was taken by the Flight of Hope. This unique ecological program was intended to West Siberian White Crane (Sterkh) entered in the Red Book. Ornithologists and specialists of VNIIprirody (All Russia Scientific Research Institute for nature), Okskiy State Biosphere Reserve, as well as scientists from over a dozen countries of the world participate in this project. ITERA provides financial and information support to the project.[38]
ITERA Group of Companies is a big protagonist of cycling and strongly supports this sport both in Russia and abroad. ITERA Group is a sponsor of the European Cycling Union. In March 2011, after negotiations, UEC President, Wojciech Walkiewicz, and the Chairman of Board of Directors ITERA Oil and Gas Company Ltd. and the President of Russian Cycling Federation in one person, Igor Viktorovich Makarov, have signed a contract for financial support till the end of 2011. There is possibility to prolong the contract for next years.[39] In Russia ITERA is a long-term main sponsor of the Russian Cycling Federation and one of the three key sponsors (together with Gazprom and Rostechnologii) of Russian cycling teams – Katusha ProTour cycling team[40], ITERA-Katusha continental cycling team[41] and two youth cycling teams ITERA-Katusha Under 21 and ITERA-Katusha Under 23[42] ProTour team Katusha is one of the best world cycling teams. In 2010 it topped first in the annual world team rating, having won such prestigious cycle races like Vuelta a Espana and Vuelta Catalunya. Meanwhile, its leading rider, Joaquim Rodriguez, was the first in the final individual classification.[43] In 2011 Katusha performed less effectively, however, already won the top of the podium at such races like Classica Sarda and Vuelta Burgos. At the same time, ITERA-Katusha continental team did much better. According to UCI Europe Tour Ranking of July 27th, 2011, the team held the first place among continental teams of Europe with 863 points. The second continental team of the ranking – “Rabobank Continental team” from Holland, has a 90-points-gap, while "Loborika Favorite Team" from Croatia is 3rd, 336 points far from Itera-Katusha. At the moment, “Itera-Katusha” has 51 podium places in the UCI Europe Tour races, 20 of them – victories. Among all teams, which take part in the UCI Europe Tour Ranking (19 professional continental teams and 80 continental teams, total – 99 teams), “Itera-Katusha” is still at 7th place, ahead of 12 big professional teams, among them: “Geox-TMC”, “Farnese-Vini”, “Colnago-CSF Inox”, “CCC Polsat Polkowice”, “Bretagne Schuller”, “Team Type 1” and “Topsport-Vlaanderen”. [44] ITERA Latvia is one of the major sponsors of Latvian hockey club “Dinamo Riga”.[45] Project of a unique office building for the XXII Winter Olympic Games’ Organizing Committee and the XI Para-Olympic Games of 2014 in Sochi, which is being built by a developer subdivision of ITERA International Group of Companies, passed successfully the public ecological hearings and received positive conclusions by the State Ecological Expertise and the State Expertise of Project Documentation. Large-scale application of state-of-the-art technologies and equipment shall allow the Project for an award of BREEAM, an international ecological certificate. The building Complex of Sochi-2014 Organizing Committee is located at the territory of the Olympic Park in the Imereti Plain. The Complex is to meet all standards of «green» construction based on safety standards and the impact of the building on the environment. Three side wings of the Office Complex with a total area of 43 thousand square meters reconcile architectural novations, innovative equipment and construction materials, an optimal energy saving system and the use of natural sources of energy. Roofing of a nine-story-building opens a view to the Olympic Games’ sites and as well as the area neighboring the building shall be fit with leisure zones in an exclusive landscaping. The ITERA Group plan is to commission the facility in late 2012. OJSC Concern MonArch is a general contractor and designer of the Project worth over USD 130 million.[46]
ITERA has signed an agreement with Russian Gubkin Oil and Gas State University. According to the agreement, ITERA provides grants to the best-performing students. The Company also finances a number of scientific projects, and assists in technical equipment of the curricula.[47] ITERA is one of the trustees of Saint Petersburg State Mining Institute (Technical University). It provides assistance in developing its educational and scientific base, preserving and renewing a group of historical buildings, repairing and constructing student dormitories, introducing innovative programs and technologies. There’s a specialized classroom that was equipped using the Company’s funds. [48] ITERA provides financial backing for constructing Moscow Management School, which is to become one of Europe’s most prestigious education establishments.[49]
The Russian state-controlled company Gazprom conducted dubious transactions with Itera and a Gazprom/Itera joint-venture, Purgaz, in the late 1990s. Billions of dollars of Russian natural gas resources were transferred from Gazprom to Itera for artificially low prices and then sold to the markets by Itera, allegedly profiting Gazprom managers who were also beneficiaries of Itera.[50]
Itera is being suspected to have business connections with the Sicilian Cosa Nostra, a crime syndicate. Mafia Don Massimo Ciancimino stated in a 2005 deposition in Italian courts that he met up with Igor Makarov in Cortina d'Ampezzo, trying to organize a deal to use mob money to set up a gas distribution network to "broaden his business interests".[51]
In March 2002, the U.S. Trade and Development Agency cancelled a $868,000 grant to Itera as questions were raised about its legitimacy. In May, Representative Curt Weldon led a congressional delegation to Russia and visited Itera. After his return, he publicly supported Itera's efforts. In the beginning of September of that year, Itera paid the expenses for a Weldon trip to NYC. The following week, Itera told Karen Weldon, the Congressman's daughter, it would sign a contract with her newly formed lobbying firm, Solutions North America, Inc. On September 24, Curt Weldon co-hosted an event at the Library of Congress honoring Itera's chairman. On September 26, Weldon gave a floor speech praising Itera. On September 30, SNA received a $500,000 annual contract with Itera, with $170,000 up front. In November, Itera paid for Karen to join Rep. Weldon on a trip to Eastern Europe and Russia. In January 2003, Itera opened U.S. offices in Jacksonville, Florida, and paid for Rep. Weldon to attend the opening.[52]