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Wednesday, September 19, 2007

Mogul still eyeing Bashkiria assets

11 September 2007 - Upstream OnLine - Russian billionaire Vladimir Yeytushenkov still hopes to win control of the $7 billion Bashkiria oil assets through his Sistema conglomerate despite wide expectations they will pass into the control of state energy companies, its chairman said today. Yevtushenkov told an investment summit in Russia that he was talking to all interested parties such as state-controlled gas export monopoly Gazprom and state-controlled oil major Rosneft , Reuters reported. "I'm in the middle of this fight. The situation is in fact more complicated than it may seem from newspaper reports," said Yevtushenkov, who has personal wealth of over $9 billion with most of his assets in telecoms and high-tech business. "It can drag on for eternity. There should be some development this year. We will have to either sell the assets or buy out the entire stock," he said. The Bashkiria oil assets were initially controlled by the government of the Urals region of Bashkortostan on behalf of the Russian Federation, but have changed hands many times in recent years. In August, the Moscow Arbitration court ruled the assets should be handed to the state due to a series of illegal transactions in the shares. The assets include mid-sized oil producer Bashneft; refineries Novoil , Ufimsky , Ufaorgsintez and Ufaneftekhim and retailer Bashkirnefteproduct . Sistema bought stakes of around 25% in each of the units several years ago and has said it wanted to help the current major shareholders build a transparent, vertically integrated company on the basis of existing and new assets. Russian exchanges suspended trading in the shares pending clarification of legal suits as the current owners – whose identity is unknown - have filed for arbitration. Analysts have long said the Bashkiria oil assets could eventually fall under the wing of state-controlled companies as the Kremlin wants to tighten its grip over the energy sector. Interfax news agency reported last week the government would split the assets between Rosneft and Gazprom. The agency cited unnamed sources as saying Gazprom would get oil-producing assets of Bashneft , while Rosneft would get four refineries and a network of petrol stations. Rosneft's chief financial officer Peter O'Brien told Reuters today his company would consider buying Bashkiria refineries when they are offered for sale.

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