Gazprom to finish negotiations with Sibneft by the end of this year

Gazprom hopes to wrap up talks to buy Sibneft by the end of this year, a senior executive said as bankers close to the Russian oil group work to secure financing package for the takeover.

The move will give Russia state-control over two oil and gas groups with substantial minority investments, each chaired by close aides of President Vladimir Putin.

Gazprom is pushing to buy not just the 72 per cent of Sibneft controlled by billionaire oligarch Roman Abramovich and his associates but a further 20 per cent held by Yukos as a legacy of the failed Yukos-Sibneft merger of 2003. Meanwhile, Rosneft will control Yuganskneftegaz, and possibly further Yukos assets, and could also have minority foreign ownership, Reuter reports.

The cost of the purchase has been estimated at 10-12 bln usd.

Sibneft has 4.5 bln barrels in reserves and produced 34 mln tons of oil last year.

Medvedev also said Gazprom's export unit, Gazpromexport, expects sales of about 27 bln usd in 2005.

'We made an initial forecast of 25 bln usd. But sales of between 26.5 bln usd and 27 usd, depending on foreign exchange rates, are realistic figures,' he said.

He said overall exports will reach 200 bln cubic meters this year including exports from republics of the former Soviet Union, Forbes reports.

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