Gazprom Neft Looks at Possibility of TNK-BP Stake Buy

LONDON (Dow Jones Newswires), August 1, 2008

Gazprom Neft, the crude oil arm of Russia's state-owned OAO Gazprom, has looked at the possibility of acquiring a stake in BP PLC's TNK-BP Holding joint venture, people familiar with the matter said this week.

But the people said the Russian firm is unlikely to make a move before its parent, Gazprom, exercises a call option to acquire a 20% Gazprom Neft stake held by an affiliate of Italy's Eni SpA. Gazprom Neft declined to comment.

Thursday, Eni said Gazprom is likely to make use of the option on the Gazprom Neft shares, which the Italian firm's affiliate bought from bankrupt oil producer OAO Yukos in April 2007. The call option is due to expire in April 2009.

Gazprom Neft is also unlikely to enter the joint venture before TNK-BP's shareholders - BP and Russian consortium Alfa-Access-Renova - settle an ongoing dispute, the people said.

Gazprom was already known to be interested in getting a stake in TNK-BP, but Gazprom Neft - which shares a focus on oil - "would make more sense" as a shareholder, one of the people said.

"They have looked at it (TNK-BP)," another person said, referring to Gazprom Neft. The person added that the interest is current but said he is unaware of any talks.

The people familiar with the matter said the acquisition may not be in cash and could also be through a share swap with one of TNK-BP's existing shareholders.

Both BP and the Russian shareholders, however, have said they don't want to sell their stakes in TNK-BP.

If the operation happens, Gazprom Neft's entry into TNK-BP would represent another telling example of increased control by the state over the oil industry in Russia.

Gazprom Neft is itself the result of the acquisition by Gazprom in 2005 of Sibneft, an oil company then owned by oligarch Roman Abramovich.

But Gazprom or Gazpromneft face a potential rival in OAO Rosneft, another Russian state-owned oil producer.

In the first months of this year, it was pretty clear that Gazprom would come into the company, a person close to the matter said. But he said that as soon as Igor Sechin, chairman of Rosneft, was appointed First Deputy Prime Minister in the new cabinet of Vladimir Putin, the sentiment changed and people started saying that Rosneft and not Gazprom should take a stake in TNK-BP.

However, another person familiar with the matter said Rosneft is unlikely to try buying a stake in TNK-BP at this stage because it is busy preparing other moves.

Copyright (c) 2008 Dow Jones & Company, Inc.

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