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The Moscow Times: Gazprom Denies Borrowing $10Bln to Finance Sakhalin-2

Wednesday, January 24, 2007. Issue 3581. Page 5.
Reuters

Gas monopoly Gazprom said reports that it was seeking a $10 billion loan to buy half the Sakhalin-2 project and assets of bankrupt firm Yukos were “wrong.”

Interfax news agency on Tuesday quoted a banking source as saying Gazprom was holding talks with bank organizers and could give a mandate within one month.

“This report is wrong,” a Gazprom spokesman said.

Gazprom agreed last month to buy into the Sakhalin-2 project by paying $7.45 billion to existing shareholders Royal Dutch Shell, Mitsui and Mitsubishi.

The firm also said it would look into buying some gas and oil assets of bankrupt oil firm Yukos. Yukos’ bankruptcy receiver is expected to begin auctioning assets within months.

Gazprom was forced to increase its borrowing by one-third in 2006 to 118.9 billion rubles ($4.5 billion) after it bought minority stakes in the country’s second-largest gas producer, Novatek, and Moscow city utility Mosenergo.

Gazprom said it planned to stick to its long-term target to borrow no more than 90 billion rubles from 2007 to 2009, despite failing to deliver on its pledge in the past few years. Many analysts doubt the plan to cap borrowing is feasible after the Sakhalin-2 deal, which is due to close in the first half of this year.

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