Bloomberg News

Gazprombank Unit in Final Talks to Buy Namibia Gas Stake

November 18, 2011

(Updates with Gazprombank unit in second paragraph.)

Nov. 18 (Bloomberg) -- A unit of OAO Gazprombank, the lending arm of Russia’s biggest company, is in final talks to buy a 38 percent stake in Namibia’s delayed Kudu gas project.

“Mid-December is the expected time when negotiations will be completed and the final composition of the upstream consortium will be defined,” Sergey Tagashov, communications director at GPB Neftegaz Services BV, the oil and gas unit of Gazprombank, said today in an e-mailed statement.

Isak Katali, the southern African country’s mines minister, told Namibian Broadcasting Corp. radio earlier today that Gazprombank was in talks to buy a 54 percent stake in Kudu. Tagashov denied this.

Project operator Tullow Oil Plc, Itochu Corp. of Japan, Namibia’s state-run Namcor and GPB Neftegaz Services are in talks to form a group and develop the field off the Namibian coast to supply gas for power generation. Commercial production at Kudu has been delayed for more than a decade as the project changed hands.

“We have been talking about Kudu Gas for a long time,” Katali told the radio station. “We need to make a final decision, or shelve it altogether and look at other things.”

The two sides are divided on the currency used to sell the gas, with regional customers seeking to buy using South African rand and investors planning to sell in dollars, Katali said.

The proposals for the project include an 800 megawatt gas- fired power station at Oranjemund to be managed by state-run Nampower.

--Editors: Stephen Cunningham, Amanda Jordan.

Anna Shiryaevskaya in Moscow at ashiryaevska@bloomberg.net Chamwe Kaira in Windhoek at ckaira@bloomberg.net

To contact the reporter on this story:

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Hilton Shone at hshone@bloomberg.net


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