Khudaynatov, 50, has been appointed Rosneft president for three years starting September 6, the company said in a statement Monday.
The appointment follows recent talk that the relationship between Bogdanchikov and Russia's deputy prime minister, Igor Sechin, who is also Rosneft's chairman, has been "strained," with the two men differing on their views for the company's future.
"It is expected that Rosneft will now be taking decisions quicker,including on entering projects abroad, taking into account global trends on the international markets," a source in the government said, pointing todelays in a recent deal with UAE-based private oil and gas player Crescent
Petroleum.
Although Bogdanchikov was reportedly against the partnership with Crescent Petroleum, the two companies signed a farm-out agreement on Rosneft taking a 49% stake in the Sharjah onshore concession in June. Bogdanchikov then said that the agreement "marks a major milestone for us, and we look forward to working on other opportunities together with Crescent Petroleum in
the Middle East and North Africa."
Khudaynatov is likely to manage the company more in line with Sechin's understanding of what its strategy should be, analysts said.
'NEXT DEVELOPMENT PHASE'
Commenting on Khudaynatov's appointment, Sechin, who supervises Russia's oil sector, said: "Today Rosneft occupies the leading position in the Russian oil industry. I'm confident that [Khudaynatov's] has the experience and insights to lead the management team as Rosneft enters its next development stage," according to a statement posted on Rosneft's website Sunday.
Bogdanchikov, 53, who had been Rosneft's president since October 1998,had been facing an uncertain future after his contract was not renewed in late June.
Under his management the company grew into the country's biggest oil producer, with crude output rising to around 113 million mt in 2009 (2.26 million b/d) from 13.1 million mt in 2000, mainly through the acquisition of Yukos assets in 2004 following the government-forced bankruptcy of the then
biggest oil producer in Russia.
In another indication that conflicts over the direction the company should take are likely to be resolved, a company spokesman said Monday that Rosneft expects to submit its development strategy until 2030 to its board of directors for approval in the near future.
"It will be submitted very soon," he said, providing no specific time frame and declining to give the strategy's details until it is approved.
Analysts have taken the replacement positively but cautiously.
"Although lacking public market experience, we regard Khudaynatov as a seasoned industry professional, and believe he is well suited to lead Rosneft into the future," Alexander Burgansky with Renaissance Capital said in a note.
On the other hand, the company is likely to start financing major projects that are politically important but with doubtful economic efficiency, which might negatively affect the company's corporate management, analysts with Metropol said in a note.
INTERNATIONAL FOCUS
The market's reaction is likely to remain mainly neutral for some time as the replacement had been long expected, but in the future a lot will depend on announcements by the company's new management, said Valery Nesterov at Troika-Dialog investment company.
He added that companies worldwide are now embracing strategies of international expansion and said Russia should not remain on the sidelines in this, a position what Bogdanchikov had been reported to oppose.
"The key question is why Russia is to do this--to support certain political regime or to gain profits," he said, adding that a politically motivated project quite often leads to a waste of money.
On the London Stock Exchange, Rosneft shares were up 1.68% as of 1000 GMT, from $6.56/share at the close Friday.
The announcement on Khudaynatov's appointment came a day after Russia's President Dmitry Medvedev Saturday requested the government consider Khudaynatov as the new president of the state-run company.
Khudaynatov has worked at Rosneft since 2008, when he started as a company vice-president. Since January 2009, he has been the company's first vice-president, in charge of production and capital construction.
In 2003-2008, Khudaynatov worked as the general director of Severneftegazprom, a joint venture between Russian gas giant Gazprom and Germany's E.ON and BASF, developing the Yuzhno-Russkoye gas fields in West Siberia. Before that he served in various official positions in Russia's keyoil province of West Siberia.
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