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Denis Grishkin / Vedomosti
Bogdanchikov listening to Sechin, background, during a meeting on Friday.
The government also voted to include Vladimir Bogdanov, chief of rival oil producer , in Rosneft's board. Bodganov's nomination earlier this year fed speculation that the companies were moving toward some form of merger, a possibility that Rosneft chairman and Deputy Prime Minister Igor Sechin brushed off on Friday.
Answering a question from a shareholder on the possibility of a merger, Sechin pointed to Bogdanov, who was nodding off nearby, and said, "Judging by the fact that Bogdanov ... is taking a bit of a nap, no, it's not being planned. Otherwise, he wouldn't be sleeping. The answer is no."
Last year's shareholders meeting was held while Rosneft's shares were near their all-time high of 288 rubles on the MICEX, shortly before crashing equities markets and world oil prices drove them down 70 percent to 83 rubles in November. Rosneft's share finished Friday up 2.7 percent on the MICEX.
Despite the tumultuous year, Rosneft shareholders -- many of whom bought small stakes during the vaunted "people's IPO" in July 2006 -- appeared at least as interested in the company's future, although management didn't escape thorny questions about its dividends policy.
Under the company's newly approved charter, Rosneft's board will take the place of shareholders in hiring and firing company heads, giving them greater flexibility with its top executive. The new charter also dropped the requirement that its chief executive be an oil industry veteran, a change that could signal the dismissal of longtime CEO Sergei Bogdanchikov.
"It will be the board that defines requirements for the chief executive in the event of appointing a new one," said Larisa Kalanda, vice president for legal affairs.
In a further tightening of the screws on management, shareholders approved measures allowing for greater board involvement in running the company, including a rule that lets the board slap unspecified sanctions on the CEO if he does not cooperate.
The board's control will be so tight that it will now appoint an acting CEO every time the top executive takes a trip or a leave of absence.
Bogdanchikov brushed off the changes, saying they reflected what had already been the board's heavy involvement in managing Russia's largest oil producer.
"This just reflects the situation that has become the practice in the company's activity," he said in response to a question from The Moscow Times on the sidelines of the meeting.
"It's because of the size of the company, its prospects and large projects. ... Not that I am afraid of responsibility, but ... we can't just look at what's beneficial for the company," Bogdanchikov said. "Sometimes, it could run counter to the interests of the state, which would probably be wrong."
The board will also be able to approve additional share offerings of as much as 25 percent of existing shareholder equity.
Bogdanchikov said at the shareholders meeting that there was no reason to expect a conflict of interest because of Bogdanov's nomination.
"The interests of the companies virtually don't intersect," he said, adding that Rosneft considered and TNK-BP as its main rivals.
Bogdanchikov said at a news conference later that Rosneft and Surgut supplied different markets in Russia and abroad and that such divisions would continue to 2030. Sechin said on the sidelines of the meeting that the two companies pumped oil in different areas, adding that the nomination of a highly qualified oil executive to the board would help increase transparency in running Rosneft.
Sechin said in July 2008 that he wanted fewer state officials on Rosneft's nine-member board. The outgoing state representatives -- Kremlin chief of staff Sergei Naryshkin and Gleb Nikitin, deputy head of the Federal Property Management Agency -- were replaced by Bogdanov and Nikolai Tokarev, president of state oil pipeline operator .
Rosneft will start developing a major new field next year after it launches Vankor later this year, Bogdanchikov told shareholders. Rosneft will spend 25 billion rubles ($800 million) on the Yurubcheno-Tokhomskoye field next year alone, he said.
The company will increase production in 2009 to 112.3 million tons, from 110 million tons last year, Bogdanchikov said. The company has not cut its capital investment.
"I can't say we had to shrink," he said. "We are making decent money."
Rosneft's anti-crisis plan stipulates cutting costs from last year by 18 billion rubles, Bogdanchikov said, adding that the company was on track to reduce its debt burden to $15 billion in 2010, a level that he called "optimal."
Rosneft has paid off or restructured more than $7 billion of its debt so far this year, Sechin said, much of which was incurred while swallowing up the assets of now-bankrupt Yukos.
Sechin and Rosneft executives fielded numerous questions from individual shareholders about raising dividends and reducing or canceling hefty salaries for board members. Sechin politely rebuffed suggestions of cutting the payouts, saying the company's peers, such as BP and , paid their board members even more.
The company said in April that its 2008 dividends would be 20 percent higher than a year earlier, but many shareholders remained disgruntled, especially after board member Hans Jorg Rudloff said Western companies the size of Rosneft generally pay more in dividends. Sechin tried to drum up enthusiasm for the dividend in his opening speech. After an initial statement that dividend payments would be increased drew only a tepid response, he encouraged the audience by saying, "It's the right reaction," and he then clapped until he got more enthusiastic applause.
