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Reuters: Russia's Gazprom says will soon outgrow BP, Shell: "...Royal Dutch Shell is worth $223 billion.": Sunday 15 January 2006


Sun Jan 15, 2006 6:02 PM GMT


MOSCOW (Reuters) - Russia's Gazprom expects to be the second most highly valued energy company in the world soon and sees its current position behind BP and Royal Dutch Shell as only temporary, its chief executive said.


Gazprom (GAZP.RTS: Quote, Profile, Research) listed on Moscow's RTS exchange on Thursday in the culmination of a years-long push to scrap a ban on foreigners owning stock in the world's largest gas company and make it easier for investors to buy its shares.


In an interview shown on Rossiya television on Sunday, Chief Executive Alexei Miller said the scheme had gone according to plan, and had valued his company at more than $200 billion (113 billion pounds).


"This is a historical frontier for our country and, of course, for Gazprom. Now the company has taken fourth place in the list of the world's biggest oil and gas companies. And I can say only centimetres separate us from the second and third places," he said.


"We are lagging BP and Shell a little. But I think this is a temporary phenomenon."


The largest energy company in the world is U.S. giant ExxonMobil (XOM.N: Quote, Profile, Research) with a market capitalisation of $375 billion. BP (BP.L: Quote, Profile, Research) has a capitalisation of $237 billion, while Royal Dutch Shell (RDSa.L: Quote, Profile, Research) is worth $223 billion.


Gazprom previously traded on small Russian bourses and via Western proxy shares (GAZPq.L: Quote, Profile, Research) listed in London. Anticipation of last week's move drove its stock to triple in 2005.


Gazprom has become an assertive branch of the Russian state -- as shown over the New Year when it turned off supplies to Ukraine for two days to press for a big hike in prices.


The crisis was finally resolved via a scheme in which Gazprom will sell Ukraine gas through an intermediary called Rosukrenergo -- half owned by Gazprom and half held in trust for Ukrainian investors by Austria's Raiffeisen Zentralbank.


Miller on Sunday pushed for the secretive group that owns Ukraine's half of Rosukrenergo to make the deal more open by selling its stake to Ukrainian state energy firm Naftogaz -- something they have so far declined to do.


"Taking into account the size of the deal, taking into account its social significance, it would be logical for Ukraine to give a positive reply and decide not to have Ukraine represented by a foreign bank, but by a state company," he said.


Gazprom is also haggling with other former Soviet states to raise the prices they pay for their gas closer to market levels.


Under a preliminary deal reached on Friday, Armenia will pay $110 a cubic metre -- around double the current price, and about in line with most price rises faced by Russia's former colonies. 


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