Gazprom-Rosneft merger plan may be altered

The Russian government is discussing the possibility of gaining control of Gazprom by giving up only a part of Rosneft integrated with Yuganskneftegaz, Yukos' former main production unit (the state owns 38.37% in Gazprom and 100% of Rosneft), Vedomosti reported.

President Putin announced the forthcoming merger, which the state needed to get a controlling stake in the gas monopoly for liberalizing its share market, in the fall of 2004. The merger was to be completed by year's end, but was postponed because of Rosneft's purchase of Yugansk.

A new plan was made public in early March 2005: Rosneft would be incorporated into Gazprom, but Yugansk would be turned into an independent company.

But that all changed yesterday. Yugansk will not be separated from Rosneft and Gazprom would get less than 100% in the integral company. Vladimir Milov, former deputy minister of energy, says officials no longer know what to do and Rosneft's management is using their bewilderment to postpone the deal.

A ranking official in Gazprom said that the scenario of Gazprom getting a minority stake in Rosneft integrated with Yugansk "is not on the table." According to a Gazprom manager, Gazprom would agree to own 75% plus one share in the integrated company, but Rosneft suggests dividing the stake between the state and Gazprom 50:50. Another manager of the gas monopoly added that Gazprom was not eager to take over Yugansk because of legal risks.

It is impossible to predict who will win in this case, said Stephen Dashevsky, chief analyst with the Aton investment company. In his assessment, Gazprom's share in the integrated oil company could turn out to be less than a controlling stake.

Chris Weafer, chief strategist at Alfa Bank, said that these new "leaks" of information from the government play into the insider game on the share market.