Rosneft to acquire Italy’s Enel stake in SeverEnergia for $1.8 bn

OAO Rosneft yesterday struck a deal to buy a 40-per cent stake in Arctic Russia BV from Italy's Enel SpA for $1.8 billion.

The acquisition would catapult Rosneft as the largest independent gas producer in Russia.

The transaction will lead to the Russian state-owned oil company holding indirect ownership of a 19.6-per cent stake in Siberian venture SeverEnergia.

The stake will be acquired by NGK Itera, a subsidiary of Rosneft, which is responsible for consolidating gas assets within Rosneft.

SeverEnergia is a joint gas production venture with 51-per cent held by Yamal Development – a joint venture of Novatek and Gazprom Neft, and 49 per cent held by Arctic Russia BV - a joint venture between Italy's Eni and Enel, where both hold 60 per cent and 40 per cent respectively.

SeverEnergia has assets in Yamal-Nenets Autonomous Region of Russia.

Enel is Italy's largest power company, and Europe's second listed utility by installed capacity. The integrated company sells power and gas to around 61 million customers.

It operates in 40 countries worldwide, with a net installed capacity of approximately 98,000 MW and about 74,000 employees.

The deal will help Rosneft increase recoverable gas reserves and gas production to 100 bcm per year and become the largest Russian supplier behind state-run OAO Gazprom.

Commenting on the deal, Igor Sechin, president and chairman of Rosneft, said, "Gas business is one of the company's strategic development priorities. Acquisition of a stake in SeverEnergia will create a multiplying effect for further growth, it will help generate additional synergies from the joint asset development within the Yamal Gas Cluster through optimisation of capex and sales channels, it will also help the company in the long run to expand contracted gas deliveries, increasing the company's market cap and raising shareholder value."

Moscow-based Rosneft has recently been on an acquisition spree that has burdened it with a massive debt of about $71 billion.

Two months back it agreed to take full control of gas producer OOO NGK Itera for $2.9 billio.

In March Rosneft became the world's largest listed company after it acquired British oil giant BP's 50-per cent stake in TNK-BP in a $55 billion in a cash and stock deal and paid $27.7 billion to buy the other half from the AAR consortium, comprising of  tycoons Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik.

The TNK-BP acquisition is the largest deal in Russian history.