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£1bn payout oils talk of Sibneft deal

THE TIMES (UK): £1bn payout oils talk of Sibneft deal

“A press report in Kommersant, a Moscow financial newspaper, suggested that a bid for Sibneft by Gazprom in collaboration with Shell was imminent. The giant Russian utility is in talks with the Anglo-Dutch oil company over the swap of a stake in Shell’s gas project in Sakhalin and a share in Zapolyarnoye, a large Siberian gasfield owned by Gazprom. Neither Shell nor Gazprom commented on the rumour.”

Tuesday 5 July 2005

By Carl Mortished, International Business Editor

MOSCOW is agog with takeover rumours concerning Sibneft, the oil company controlled by Roman Abramovich, which yesterday announced a record £1.3 billion dividend payment to its shareholders.

The scale of the cash distribution, which is almost double the oil company’s profits in 2003, has prompted speculation that Sibneft’s owners are taking funds from the company ahead of a sale.

A press report in Kommersant, a Moscow financial newspaper, suggested that a bid for Sibneft by Gazprom in collaboration with Shell was imminent. The giant Russian utility is in talks with the Anglo-Dutch oil company over the swap of a stake in Shell’s gas project in Sakhalin and a share in Zapolyarnoye, a large Siberian gasfield owned by Gazprom. Neither Shell nor Gazprom commented on the rumour.

Mr Abramovich, best-known in Britain as the owner of Chelsea Football Club, will be the largest beneficiary of the dividend windfall through Millhouse Capital, his asset management company, which owns 57 per cent of Sibneft. He is thought to be keen to liquidate his interest in Sibneft.

A previous attempt to sell by merging with Yukos, the oil company, in 2003 came unstuck with the arrest of Mikhail Khodorkovsky, the Yukos founder and, like Mr Abramovich, one of Russia’s “oligarchs”, and subsequent $27 billion tax claims against his company.

Sibneft said yesterday that the dividend was based on the 2004 financial results but these have never been published.

Some Moscow investors were sceptical that the state-controlled Gazprom was a potential buyer. “Would [President] Putin want to be seen to be giving $9 billion to Roman Abramovich?” a leading fund manager asked.

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