Gazprom buys Sibneft stake for $13.1bn

Gazprom, Russia's state-controlled natural gas monopoly, on Wednesday agreed to pay $13.1bn (€10.7bn) for Sibneft, the Russian oil group, in the largest deal in the country's history.

Gazprom said it will acquire the 73 per cent of Sibneft owned by Millhouse Capital, an offshore investment company controlled by Roman Abramovich, Russia's wealthiest oligarch.

The move will take Gazprom's stake to 76 per cent, giving it outright control. Sibneft will be the second oil company to move back under state control, following the acquisition of the largest part of the Yukos oil groupby state-owned Rosneft in a forced auction last year. The Russian state now controls about 30 per cent of Russian oil production.

Yuriy Trutnev, Russia's minister for natural resources, told the Financial Times on Wednesday: “It is clear that this deal changes the landscape of the Russian energy sector. Gazprom becomes the dominant player in the market.”

Alexei Miller, chief executive of Gazprom, said the merger creates obvious synergy and will help the natural gas monopoly diversify.

Sibneft will add about 5bn barrels of oil to Gazprom's reserves of 116bn barrels of oil equivalent. Sibneft was created 10 years ago and the majority stake in the company was sold for just over $100m to companies linked to Boris Berezovsky, a Russian tycoon who lives in exile in London, and Mr Abramovich, his junior partner at the time. Mr Berezovsky said he sold his part of the business to Mr Abramovich in 2000.

A group of western banks, including Citigroup, Morgan Stanley, Dresdner Kleinwort Wasserstein and ABN Amro, and Goldman Sachs have agreed to provide a bridge loan to Gazprom of up to $13bn to finance the acquisition. Part of that credit will be refinanced by bonds and longer-term syndicated loans.