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. Last Updated: 07/27/2016

EU Approves Gazprom's Buyout of Sibneft

BRUSSELS -- European Union regulators on Monday cleared state-controlled gas giant Gazprom, the largest producer of natural gas in the world, to buy oil company Sibneft.

The European Commission examines mergers between companies, with the average annual value of the mergers totaling $5.84 billion. The commission cleared the Gazprom deal under a fast-track procedure.

Gazprom paid $13 billion for Sibneft, giving President Vladimir Putin's Kremlin control over more than 30 percent of the country's oil industry. Gazprom supplies practically all of the natural gas in Russia and approximately 24 percent of the natural gas consumed in the European Union, Norway, Iceland and Liechtenstein.

Sibneft does not export any natural gas to the European Union. Gazprom's management has announced it will consolidate all of the company's oil assets into a single division, Gazpromneft, and raise oil production from 10.5 million tons to nearly 40 million annually by 2010.

The deal will realize Gazprom's long-held aim of expanding further into oil production.

The world's largest natural gas producer, long groomed as a state energy giant to rival Saudi Arabia's Aramco, came under state control in June when the government raised its stake above 50 percent.

Under Putin, the government has moved to snap up chunks of the strategically important oil sector.