The Seeds of a New Oil Giant

Gazprom has plans to create a 100% oil subsidiary called Gazpromneft this summer. The plans are to incorporate it in 2-3 years and to sell up to 49% of its shares to investors.

The new entity is going to produce up to 30-40mn tons of oil by 2008-09, which is similar to Sibneft?s figures. Future investments in the project are not decided yet. Experts say capacities to stabilize condensate would already need about USD 1.5-2bn.

There are concerns about export through Transneft, the state oil transportation company. Transneft is skeptical about Gazprom?s plans, saying it does not have capacity for another 40mn tons.