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Russia: State-owned majors scrap over oil assets

Two landmark bank loans will reinforce the dominance in Russia's oil and gas sector of two of the largest state-controlled companies – fuelling rivalry between them.

State holding company Rosneftegaz is talking to banks about a $7.3 billion loan to finance its purchase of 10.7% of Gazprom. The loan is intended as a bridge to a Rosneft IPO. State-owned Rosneft aims to become Russia's biggest oil producer after buying assets that once belonged to now-bankrupt Yukos.

The second loan could finance Gazprom's purchase of a majority share of Sibneft, oligarch Roman Abramovich's oil company.


Intra-Kremlin politicking complicates both transactions, with those around Igor Sechin, deputy head of the presidential administration and Rosneft chairman, at odds with those around Dmitry Medvedev, presidential administration chief and Gazprom chairman.

Stephen O'Sullivan, oil and gas analyst at Moscow's United Financial Group, says this competition between two state-owned companies is "perhaps unique to Russia".

Gazprom bought 3% of Sibneft shares in August – a possible attempt to stop Rosneft getting a blocking minority stake in it.

Another 5% of Sibneft shares are in free float, Abramovich's vehicle, Millhouse Capital, owns 72%, while 20%, acquired by Yukos during its aborted merger with Sibneft in 2003, are frozen.

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