Russ Oil-Gas

December 17, 2007 - ASSOCIATED PRESS - FRANKFURT, Germany – German-based utility E.On AG said Monday it has made “major progress” in talks with Russia's OAO Gazprom aimed at giving E.On a stake in a Siberian gas field in exchange for stakes in its European assets. Talks between Duesseldorf-based E.On and Gazprom have been under way for two years. “Major progress has been made in the negotiations on an asset swap between Gazprom and E.On in the framework of which E.On will acquire a stake in the west Siberian gas field Yuzhno Russkoye and Gazprom will acquire stakes in E.On assets in western and central Europe,” E.On said in a statement. It said, however, that the value of the potential deal has yet to be worked out. “The valuation of these assets still has to be made and, in the event of a value imbalance, additional assets should be agreed on,” the statement said. E.On has not disclosed the size of the stake it would receive in the gas field. In return, Gazprom would get stakes in power plants and underground gas storage facilities that E.On owns and operates in western and central Europe. The German company did not specify which facilities Gazprom would take stakes in. E.On has said that it hopes to rely on the Russian gas project to account for about 60 percent of its natural-gas production goals. It is aiming for 10 billion cubic meters of gas production annually, with Yuzhno Russkoye accounting for about 6 billion cubic meters of that. Shares of E.On fell more than half a percent to 145.26 euros ($209.07), part of a wider decline on the DAX, itself down 1.5 percent to 7,825.29.