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Monday, January 16, 2006

Russia's Gazprom Looks to Outgrow BP, Shell in Market Capitalization

Gazprom Logo / Image by Mosnews.com16.01.2006 MosNews - Russian natural gas monopoly Gazprom expects to be the second most highly valued energy company in the world soon and sees its current position behind BP and Royal Dutch Shell as only temporary, the company's chief executive Alexei Miller said on Sunday, Jan. 15. Gazprom was listed on Moscow's RTS exchange on Thursday, Jan. 12, the culmination of a years-long push to scrap a ban on foreigners owning stock in the world's largest gas company and make it easier for investors to buy its shares. In an interview shown on state television on Sunday, Gazprom's CEO Alexei Miller said the scheme had gone according to plan, and had valued his company at more than $200 billion. MosNews also reported on Friday, Jan. 13, that based on the results of the first week of trading Gazprom's capitalization exceeded $210 billion, judging from ADR prices. "This is a historical frontier for our country and, of course, for Gazprom. Now the company has taken fourth place in the list of the world's biggest oil and gas companies. And I can say only centimeters separate us from the second and third places," he said, quoted by the Reuters agency. "We are lagging BP and Shell a little. But I think this is a temporary phenomena." The largest energy company in the world is U.S. giant ExxonMobil with a market capitalization of $375 billion. British Petroleum has capitalization of $237 billion, while Royal Dutch/Shell is worth $223 billion. Gazprom previously traded on small Russian bourses and via Western proxy shares listed in London. Anticipation of last week's move drove its stock to triple in 2005. Gazprom has become an assertive branch of the Russian state —- as shown over the New Year when it turned off supplies to Ukraine for two days to press for a big hike in prices. The crisis was finally resolved via a scheme in which Gazprom will sell Ukraine gas through an intermediary called RosUkrEnergo —- half owned by Gazprom and half held in trust for Ukrainian investors by Austria's Raiffeisen Zentralbank. Miller on Sunday pushed for the secretive group that owns Ukraine's half of Rosukrenergo to make the deal more open by selling its stake to Ukrainian state energy firm Naftogaz —- something they have so far declined to do. "Taking into account the size of the deal, taking into account its social significance, it would be logical for Ukraine to give a positive reply and decide not to have Ukraine represented by a foreign bank, but by a state company," he said. Gazprom is also haggling with other former Soviet states to raise the prices they pay for their gas closer to market levels.

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