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. Last Updated: 07/27/2016

Novatek to Increase Price for Total Stake

French oil firm Total's plan to take a $1 billion stake in gas firm Novatek took a double hit on Friday when Novatek said it wanted more money and the Federal Anti-Monopoly Service denied clearing the deal.

The world's No. 4 oil firm announced last September that it was buying 25 percent plus one share -- a blocking stake -- in Novatek, the country's No. 2 gas firm.

But the deal has been bogged down in a review by the anti-monopoly service, which has said it is waiting for Novatek to finish a corporate restructuring before making its decision.

A spokesman for Novatek, which doubled its profits in the first nine months of 2004 over the same period in 2003, said the firm now wants more money.

"We are not currently holding talks with Total, but when they resume we will ask them for a price upgrade due to positive changes in our company since a preliminary deal was signed," Novatek spokesman Mikhail Lozovoy said.

"We have implemented a major consolidation and think the company is worth more now," said Lozovoy. He declined to disclose other details.

Inessa Varshavskaya, Total's vice president for business development in Russia, said: "We are still waiting for the anti-trust body to approve the deal, because we see no reason why it shouldn't be approved and do not understand how Novatek's restructuring could be linked to this transaction."

Total is in regular contact with Novatek but has not received any request from the gas firm for a price upgrade so far, she said.

Since the announcement of Total's investment, a small number of Novatek shares have begun trading on the MICEX, and the price has risen from around 30,000 rubles ($1,090) in December to 35,500 rubles on Friday.

Total appeared to get a glimmer of hope for final approval for the deal after Interfax reported Friday that the anti-monopoly service had recommended that the government allow the investment to go ahead.

But the head of the service, Igor Artemyev, scotched the Interfax report.

"I deny that information," he told reporters. "There has been no decision."

Artemyev said the agency's decision was likely to come in mid-April, in line with its previous pronouncements.

The approval process for the deal, announced in September, has taken much longer than the usual couple of months.

With Russian gas seen by the state as a strategic industry and dominated by Gazprom, the world's biggest gas producer, some analysts have asked if the Novatek deal is not being delayed by worries about easy foreign access to new deposits and trunk export and even domestic pipelines.

Interfax reported last month that French President Jacques Chirac had sent a letter to President Vladimir Putin, asking him to expedite approval of the Novatek deal.

Putin and Chirac will meet in Paris this week, and Total shareholders are likely to watch keenly for any sign of a political push for the seemingly stalled investment.