Alexander Medvedev, deputy chairman of Russian gas heavyweight Gazprom, has told a conference in Beijing that he is optimistic that its acquisition of fellow Russian oil player Sibneft can be completed by the end of the year.
Gazprom has already raised capital in the range of $7.5-12 billion to finance the purchase, but Mr Medvedev indicated the negotiations were still at an early stage. Gazprom intends to purchase a 72% stake in Sibneft from Millhouse Capital, the investment vehicle controlled by oligarch Roman Abramovich.
Gazprom is also apparently confident that it can gain an additional 20% share of Sibneft currently owned by embattled Yukos. This stake is a legacy of the failed Sibneft-Yukos merger effort in 2003. While there has been speculation that Gazprom may be lining up a bid for Sibneft since early summer 2005, this is the first public confirmation that talks on a tie-up are underway.
Gazprom’s possible purchase of Sibneft is likely to fuel concerns among Russia observers that two of the country’s largest energy producers could effectively come under the control of the Kremlin.
Commenting to reporters, Mr Medvedev, who is also head of Gazprom’s export arm, said, Negotiations are currently in progress. At this point, it’s difficult to talk about the value of the deal.