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Last Updated: Monday, 14 March, 2005, 20:51 GMT
Russia moves on gas giant merger
Gazprom's Moscow HQ
The Russian state will have a controlling stake in Gazprom
A merger between Russian gas giant Gazprom and state-owned oil company Rosneft should be completed by June, according to the state energy minister.

Viktor Khristenko said the decision was agreed by the two firms and various government departments on Monday.

The merger, the biggest in Russian history, will allow the state to regain a controlling stake in Gazprom.

The deal has been slowed by the sale of Yuganskneftegaz, formerly owned by oil giant Yukos, and bought by Rosneft.

'Basic procedures'

Gazprom had originally been expected to buy Yugansk, but feared the repercussions of a US bankruptcy court decision to ban the sale.

A little-known shell company called Baikal bought it instead. Rosneft - itself wholly state-owned - then snapped up Baikal.

The Gazprom-Rosneft merger was put on hold due to the threat of international litigation over the disputed Yukos asset, but the US court rejected the Yukos case last month.

Now, under a plan to consolidate the assets of Rosneft and Gazprom, "all the basic procedures will be completed by June of this year", said Mr Khristenko.

The merger will see the government's share in Gazprom increased from nearly 38% to a controlling 51% stake.

It should also bring about an end to curbs on foreigners holding shares in Gazprom - at present foreigners can only hold proxy shares traded abroad.

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