Bloomberg News

Rosneft Takes Stake in Itera to Step Up Pressure on Gazprom

July 20, 2012

OAO Rosneft acquired a stake in natural-gas producer and trader OOO Itera in a move that may help it compete with OAO Gazprom, the nation’s largest producer of the fuel.

Russia’s biggest oil producer took a 6 percent stake in Itera, according to a statement today. Spokesmen for Itera and Rosneft declined to provide further details when contacted.

The government each year raises regulated gas rates as part of a drive to allow domestic prices to reach parity with exports, minus the cost of transit. The increases have been part of Russia’s attempt to join the World Trade Organization. Gazprom holds a monopoly on Russian exports.

“The independents and oil companies want to get into the gas business very badly, using every trick in the book to monetize their assets and entice customers away from Gazprom,” Troika Dialog wrote in a July 17 note.

Rosneft’s decision to team up with Itera gives it a ready Russian customer base for output from new gas projects, according to Troika. The total effect of Russian gas producers pushing ahead with projects may result in 100 billion cubic meters of additional gas by 2020, sapping Gazprom’s own output aims, Troika wrote.

Rosneft will rely on increased gas output to deliver on plans to raise output 48 percent to 3.7 million barrels of oil equivalent a day in 2020 from 2010. The state-run company plans to quadruple gas production to 45 billion to 55 billion cubic meters by 2020, according to a company presentation earlier this year. Those figures include associated gas, or the gas produced alongside oil.

To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net

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


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