Russian Gas Monopoly To Be Even More Powerful

Russian Industry and Energy Minister Viktor Khristenko criticized Gazprom?s $13.1 billion takeover of the Russia's fifth largest oil firm Sibneft, saying the deal would strengthen Gazprom's position as the national gas monopoly.

?This deal raises concerns linked to the size of Gazprom, the state?s role in the company and the fact that it is already a monopoly ?- and will also have an oil business,? Khristenko told the Vedomosti business daily Wednesday.

Prime Minister Mikhail Fradkov said on Tuesday, that a government order instructing Gazprom to go ahead with the deal would be finalized soon. Economy Minister German Gref, who sits on Gazprom?s board, has dropped his reservations over the deal - which will secure state control over a third of Russian oil output - but Khristenko has not.

He cautioned that under plans to liberalize trading of Gazprom?s equity free float, foreign investors would have a greater say in how the company is run. ?Foreign investors will ... watch the company closely. We cannot ignore this, because there are laws and regulators on those markets where Gazprom?s shares are traded,? Khristenko said.

Analysts believe the Gazprom-Sibneft deal has the Kremlin?s blessing and will go through despite the concerns expressed by government ministers. As MosNews has reported on earlier occasions, the Russian gas monopoly secured a record $12 billion loan from a consortium of Western banks to finance the purchase of a 72-percent stake from billionaire Roman Abramovich and his associates. Gazprom has also purchased 3 percent of Sibneft?s shares on the open market, bringing its total holding to a controlling share.