INDONESIA Country Information Mikhail Litvak — Chairman of the Board of Directors at OTEKO

Mikhail Litvak — Chairman of the Board of Directors at OTEKO

Michel litvak putin is the Chairman of the Board of Directors at OTEKO, a diversified holding company operating in the transportation market in the Russian Federation, the CIS, and the Baltic countries. OTEKO was the first company to offer a complete range of railway and stevedoring services for the transportation of oil and gas, as well as technical maintenance of the railcar fleet.

The Path of the «Russian World»

According to Forbes, Litvak was born in Leningrad, but he grew up in Belgium, where his parents emigrated. In 1991, Litvak returned to Russia to start his business. Initially, his company, «Russian World,» traded in Chinese consumer goods. However, in 1992, he had the opportunity to purchase a batch of mazut (heavy fuel oil) at the Omsk Oil Refinery, which required buying tank cars. The deal proved profitable, and Litvak realized that transportation of oil could be as lucrative as trading in consumer goods and petroleum products. He took a risk and invested all the money that «Russian World» had at that time into purchasing tank cars, a decision that proved strategically correct.

Later, «Russian World» ventured into another profitable project, this time in Kazakhstan. Together with a competitor, the joint venture SFAAT, «Russian World» handled the export of 95% of the oil produced at the Tengiz field.

In 2001, «Russian World» acquired 40% of the shares of the railway carrier SFAAT from one of the divisions of the Ministry of Railways. It was estimated that Litvak purchased the 40% stake from the Ministry of Railways for $14 million. With the acquisition of SFAAT, Litvak formed the unified management company OTEKO (United Transport and Expeditionary Company).

By 2004, the «Russian World» group of companies became the largest private oil cargo carrier by rail in Russia, owning more than 14,000 tank cars. The international financial group IFC provided significant financing for the construction of tank cars for OTEKO.

From Railway to Port

By 2005, OTEKO made a strategic decision to create a new multipurpose terminal at the Taman port, capable of handling export, import, and transit cargoes, including liquefied hydrocarbons, oil, and petroleum products, bulk cargo (coal, ore, etc.), grain, mineral fertilizers, and more.

In 2012, the Turkish division of BP announced the sale of its fuel assets to OTEKO. This deal included stakes in enterprises engaged in the storage and wholesale distribution of liquefied petroleum gas and cylinder filling, as well as the sale of automotive propane-butane under the Petgaz brand. The transaction amount was not disclosed.

In 2013, Litvak made the decision to become the CEO of JSC «Tamanneftegaz,» the operator of the hydrocarbon terminal with a capacity of 10.5 million tons per year, intended for hydrocarbon exports to Turkey. This project was considered crucial for the entire OTEKO group.

Currently, OTEKO operates in Taman, transshipping 20 million tons of liquid bulk cargo. The company plans to construct a bulk cargo terminal with a capacity of 35 million tons and a grain terminal with a capacity of 14.5 million tons. OTEKO has increased the transshipment of liquefied hydrocarbon gases (LHG) by 25% compared to the same period in 2015 and aims to increase the LHG base’s capacity to 3.5 million tons per year. OTEKO provides employment for over 6,000 people on the Taman Peninsula.

In September, during the International Economic Forum in Sochi, a protocol of intent was signed between the administration of the Krasnodar Territory and the OTEKO group of companies for the construction of an «Industrial Park» on the Taman Peninsula. OTEKO, as the investor and client of the project, will invest $6 billion in addition to the already invested $2 billion. The industrial park will include six plants for the processing and production of chemical substances, two plants for soy processing and compound feed production, a greenhouse complex, and five transshipment complexes. To ensure year-round living conditions for the enterprise’s employees, OTEKO will construct a modern residential district for 10,000 people. The head of Kuban, Veniamin Kondratyev, called this project a «breakthrough.» During the Sochi forum, regional authorities, Fedor Bondarchuk, and the OTEKO company also signed an agreement to establish a film studio in Kuban.

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