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Novatek, Gazprom Neft acquiring Eni’s share of Arctic SeverEnergia gas and condensate project

STEPHEN BIERMAN and JAKE RUDNITSKY

MOSCOW (Bloomberg) -- OAO Novatek and OAO Gazprom Neft, agreed to acquire Eni’s holding in a natural gas producer in the Russian Arctic for $2.94 billion, increasing control in one of the nation’s largest new energy projects.

Yamal Development, the venture owned by the Russian companies, will raise its total share in the SeverEnergia gas and condensate project to 80.4% from 51% now, Novatek said in a statement.

“This is a major positive for both Novatek and Gazprom Neft,” Oleg Maximov, an oil and gas analyst at Sberbank CIB, said by phone.

The partners are boosting their stake after state- controlled OAO Rosneft’s $1.8 billion acquisition of 19.6% in SeverEnergia from Italian utility Enel SpA, which closed this month. Rosneft’s ambitions to gain share in the domestic gas market have placed it in competition with Novatek, now Russia’s biggest supplier of the fuel after state-run OAO Gazprom, the owner of Gazprom Neft.

SeverEnergia will add more output than any other upstream energy project in Russia “by far” in the next five years, Sberbank’s Maximov, Alex Fak and Valery Nesterov said in a September note.

Eni and Enel bought SeverEnergia during the liquidation of bankrupt Yukos Oil Co. in 2007. Gazprom, later bought a 51% share which it sold to Novatek and Gazprom Neft.

Eni confirmed the agreement with Yamal Development in a statement to the Italian Stock Exchange. Italy’s biggest oil and gas producer has an alliance with Rosneft to develop Arctic offshore fields in Russia and is a partner with Gazprom on gas export pipelines.

SeverEnergia has an estimated 1.35 Tcm of gas reserves and 669 MMt of liquids, according to Novatek’s statement.

11/20/2013

 

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