Posted By Uma Rajagopal
Posted on November 9, 2024
(Reuters) – Russia is working on a plan to merge state-backed Rosneft Oil with Gazprom Neft and Lukoil, creating the world’s second-biggest crude oil producer, the Wall Street Journal reported on Friday.
Talks between executives and government officials took place over the past few months, and a deal may or may not happen, the newspaper said, citing people familiar with the matter whom it did not identify.
A combination of Rosneft, Gazprom subsidiary Gazprom Neft and Lukoil, would be second to Saudi Arabia’s Aramco and could pump almost three times U.S. oil producer Exxon’s output, the report added.
There are some obstacles, including opposition from some Rosneft and Lukoil executives and the problem of collecting funds to pay Lukoil shareholders, the report said.
Lukoil, Rosneft, Gazprom and the Kremlin did not immediately respond to Reuters requests for comment, while Gazprom Neft could not immediately be reached.
The Journal quoted a Rosneft spokesperson as saying the report was incorrect but declining to answer questions, while a Lukoil spokesman told the paper that neither the company nor its shareholders were in merger negotiations “with any parties, as this would not be in the interest of the company.
The newspaper quoted a Kremlin spokesperson as saying the administration had no knowledge of a deal.
The Kremlin said last month it could not confirm a report that Russia’s energy minister had put forward a proposal to nationalise the energy sector.
A channel called EJ on the Telegram messaging app, citing unnamed sources, reported that Energy Minister Sergei Tsivilev had suggested to President Vladimir Putin at a meeting in the Kremlin that the energy sector – a key provider of cash for the state – be nationalised.
(This story has been corrected to say merger of Rosneft Oil, Gazprom Neft and Lukoil, not Rosneft Oil and Gazprom Neft, in paragraph 1; and to clarify Gazprom Neft is a subsidiary of Gazprom, not of Gazprom and Lukoil, in paragraph 3)
(Reporting by Gnaneshwar Rajan in Bengaluru; Editing by William Mallard)
