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Gazprom Free to Buy Up Russian Gas Producers
Gazprom is finally free to buy any Russian gas producing enterprises after it has succeeded in reversing the state competition watchdog’s regulation. There are now no obstacles for Gazprom to set up monopoly not only on exports but also on the whole gas production in Russia. Experts say that oil companies will remain the only alternative gas suppliers in Russia. Many of them, however, are already selling their gas business to Gazprom.
A regulation of the Russian Federal Anti-Monopoly Service as of 2005 on the merger of Gazprom and Nortgaz restricting Gazprom in buying up gas assets has been invalidated in three instances last summer, Igor Artemyev, head of the competition watchdog said Friday. The order was substantially restricting the Russian gas giant in acquiring any new assets.
Last summer, Gazprom bought 51 percent in Sibneftegaz, which owns a large gas deposit, and started negotiating other big gas deals.
The court of arbitration has ruled that Gazprom’s takeover of Nortgaz did not establish or increased “the dominance of the gas monopolist in gas production” as the company had merely retrieved the lost asset.
Industry experts say that the repeal of the anti-monopoly service’s regulation has created legal grounds to make Gazprom an absolute monopolist on Russia’s gas market. The court decision takes away any formal obstacles for Gazprom to buy new gas producing assets. Gazprom’s earlier announced production rise of 7-10 billion cu. meters is possible only in case of new producing assets, Valery Nesterov of the Troika Dialog investment bank argues. NOVATEK and Itera are now the only two big gas producing companies. Gazprom, however, has large stakes in them and keeps on increasing its shareholding. Long-term-wise, the gas production market will be dominated Gazprom and oil companies such as LUKOIL, Rosneft, TNK-BP and Surgutneftegaz. However, LUKOIL and Rosneft are already selling most of their gas to Gazprom.
www.kommersant.com
All the Article in Russian as of Jan. 15, 2007
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