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Novatek Sells 9.8% of Siberian Asset to Gazprom for $980 Million

April 1 (Bloomberg) -- OAO Novatek, Russia’s second-largest natural gas producer, will sell a stake in its SeverEnergia project to state-controlled OAO Gazprom Neft, bringing their ownership back to parity.

Novatek’s board approved the sale of 9.8 percent of the Siberian oil and gas project to the oil production arm of OAO Gazprom for $980 million, Novatek said in a statement today. Each partner will hold 50 percent in the project, valued by the deal at $10 billion.

The producer, controlled by billionaires Gennady Timchenko and Leonid Mikhelson, is selling at a price that values SeverEnergia more than three times higher than in 2010 when Novatek first bought a minority stake in the project from Gazprom, Russia’s biggest natural gas producer. Novatek, which is seeking to boost more profitable crude output, wouldn’t have been able to consolidate the venture because no shareholder is allowed to have priority voting rights.

SeverEnergia has estimated reserves of 14.5 billion barrels of oil equivalent under Russian classifications at the start of this year, including 5.5 billion barrels of liquids. Output is planned to exceed 35 million tons of oil equivalent by 2020, Gazprom Neft said today.

Yukos Auction

With this deal, ownership of SeverEnergia will have shifted seven times since 2007 when Eni SpA and Enel SpA bought the assets at auction during the liquidation of Yukos Oil Co.

Gazprom later bought 51 percent from the Italian energy companies, selling it on to Novatek and Gazprom Neft in November 2010 for 48.7 billion rubles, or $1.6 billion at the time.

The partners agreed to buy out Eni last year, and OAO Rosneft, Russia’s state-run oil producer, acquired Enel’s stake. Novatek and Gazprom Neft’s purchase valued SeverEnergia at $10 billion, while Rosneft’s deal valued it at more than $9 billion, according to the companies. Novatek acquired Rosneft’s stake in an asset-swap deal that closed in December.

To contact the reporter on this story: Elena Mazneva in Moscow at emazneva@bloomberg.net

To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Torrey Clark, Randall Hackley

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