Russ Oil-Gas

December 27, 2007 - Bloomberg, Reuters - Gazprom's oil arm, Gazprom Neft, has received approval from the Federal Anti-Monopoly Service to buy half of Tomskneft, a Rosneft unit that once belonged to bankrupt oil firm Yukos, as the gas giant seeks to expand oil output. Gazprom Neft will pay 90.5 billion rubles ($3.66 billion) for half of Tomskneft, Kommersant reported, citing an unidentified person close to Gazprom's oil arm. The two state-controlled companies reached an agreement on the sale of the stake, Natalya Vyalkina, a spokeswoman for Gazprom Neft, said by telephone Wednesday. She declined to name the price or a time frame. Gazprom, which failed in an attempt to acquire Rosneft in 2005, has been expanding its oil business since the purchase of Sibneft from billionaire Roman Abramovich and his partners after they unraveled a merger with Yukos. The unit was renamed Gazprom Neft the same year. President Vladimir Putin's administration has used former Yukos assets to build up Rosneft and Gazprom's dominance of the oil industry. Rosneft bought Tomskneft and Yukos' other east Siberian oil assets at a $6.8 billion bankruptcy auction in May to become the country's largest crude producer and refiner after leading the bankruptcy case against Yukos last year. Rosneft said in July that it sold half of Tomskneft to the new Development Bank, formerly called Vneshekonombank, for $3.4 billion. The bank denied taking ownership of the stake. Rosneft said the sale occurred June 25, the same day it bought Yukos' trading house, Moscow headquarters and other property for the same amount. Gazprom Neft last week applied to the anti-monopoly service for permission to buy the stake in Tomskneft, Kommersant reported Monday. The Tomskneft deal ends a guessing game over the real owners of the 240,000-barrels-per-day oil producer. Rosneft had said it sold half of Tomskneft in July after buying the unit at a state bankruptcy auction in May. Tomskneft would become the first Yukos asset that Rosneft has agreed to share. The sale comes shortly after Putin blessed Gazprom chairman Dmitry Medvedev's candidacy to succeed him in the March presidential election. But the Development Bank said it was not involved in the deal, prompting analysts to speculate that it was a warehousing transaction. Rosneft produces around 2.3 million bpd, and the sale would reduce its output by about 5 percent. The addition of 120,000 bpd would increase Gazprom's oil production by 14 percent, bringing it very close to the landmark figure of 1 million bpd. Rosneft has to redeem $17 billion of short-term debt over the next year and has just decided to postpone a eurobond issue until next year due to volatile global markets.