Gazprom to buy Abramovich's Sibneft oil company for US$13.01 billion

Russia's state gas monopoly Gazprom struck a deal Wednesday to pay US$13.01 billion (Ђ10.81 billion) for control of the private Sibneft oil company, consolidating the government's control over the strategic energy industry. The purchase, the biggest in Russian corporate history, will significantly raise state-controlled Gazprom's stature in the oil sector _ an area where President Vladimir Putin's administration has been moving to recapture state dominance. The state will now control around a third of Russia's oil output. The agreement was signed Wednesday between Gazprom and Sibneft's owner, Millhouse Capital, a holding company controlled by billionaire Chelsea soccer club owner Roman Abramovich, the companies said.

It will realize Gazprom's long-held aim of expanding further into oil production. The world's largest natural gas producer, long groomed as a state energy company to rival Saudi Arabia's Aramco, came under state control in June when the government increased its stake to above 50 percent.

Gazprom will purchase 72.663 percent of Sibneft shares, the companies said. Gazprom also announced that it had previously purchased 3.016 percent of Sibneft from Gazprom's banking wing, Gazprombank _ meaning Wednesday's deal seals the gas monopoly's control of a 75.679 percent stake, the AP reports. Western banks have been reported to be ready to offer a US$12 billion (Ђ10 billion) loan to fund the deal - the largest such loan in Russia's post-Soviet history. AM

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