Russian govt downplays Rosneft expansion concerns

MOSCOW (AP) ? Russia's energy minister on Thursday downplayed concerns that Rosneft's possible purchase of BP's stake in a joint venture would threaten competition in the country's oil market.

Moscow-based TNK-BP is jointly owned by BP and AAR, a group of Russian billionaire shareholders. The two partners have been locked in a boardroom dispute for much of the group's existence, and both have acknowledged that one of them needs to go.

BP said in June it intends to sell its 50 stake. State-owned Rosneft is considered the likeliest buyer although AAR once said that that it might buy out BP.

A 50 percent stake in TNK-BP could fetch up to $21 billion, based on its market valuation at the MICEX stock exchange. TNK-BP's stock was up 3 percent Thursday morning.

Energy Minister Alexander Novak told Russian news agencies on Thursday that the government doesn't believe Rosneft's possible purchase would make the industry a virtual monopoly.

"I don't think that would be a monopolist situation," he said in comments carried by Interfax, the Russian news agency. "We have rather high competition on the market already."

BP and AAR had no comment, while Rosneft's spokesperson said Thursday that the company evaluates "a number of opportunities" on the market. She would not confirm an upcoming deal, however.

Novak added that Rosneft, already the largest oil company in Russia, had not informed the government of its plans regarding TNK-BP.

Prime Minister Dmitry Medvedev's ally Arkady Dvorkovich, who in May replaced Igor Sechin as Russia's deputy prime minister for the energy sector ? a position with traditionally more influence than the energy minister ? has spoken against the expansion of state presence in the energy sector. But Sechin, now Rosneft's chief executive, is still believed to enjoy close ties with President Vladimir Putin and hold considerable influence over the oil and gas sector.

Rosneft, 75-percent owned by the Russian government, was a mid-sized Russian oil company before becoming the country's second-largest oil producer after buying up the most lucrative assets of Yukos, an oil company which was ruled bankrupt following the jailing of its billionaire owner Mikhail Khodorkovsky.

Source: http://news.yahoo.com/russian-govt-downplays-rosneft-expansion-concerns-070912013--finance.html

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