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Rosneft's Itera buy to rival Gazprom
Aggregated Source: Shanghai Daily: Business

ROSNEFT, Russia's top oil producer, plans to complete its acquisition of gas company Itera, a newspaper reported yesterday, strengthening its domestic market position as it seeks to chip away at Gazprom's export monopoly.

Rosneft already owns a 51 percent stake in Itera, which used to be Russia's second-largest gas producer, and its board has approved the purchase of the remaining 49 percent for around US$3 billion, the Kommersant daily reported citing sources.

Chief Executive Igor Sechin is building up the state energy major into a global player, buying up domestic players and partnering with the world's biggest energy firms, led by ExxonMobil, to exploit its vast reserves.

In the biggest coup since he moved from government to head Rosneft a year ago, Sechin completed the US$55 billion purchase of Anglo-Russian oil venture TNK-BP in March, in a deal that turned Rosneft into the world's largest listed energy firm by output.

That is not enough for Sechin, a former deputy chief of staff to President Vladimir Putin who has set a goal of ramping up gas production at Rosneft by two-and-a-half times by the end of this decade.

"Rosneft has ambitious plans to produce 100 bcm in 2020, so strengthening its gas project portfolio is in line with that strategy," VTB Capital said in a note.

The reported price, at US$78 per barrel of oil equivalent reserves, looked expensive, according to VTB Capital.

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Copyright Shanghai Daily: Business