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. Last Updated: 07/27/2016

Sibir Owner in Talks to Sell to Gazprom

Sibir Energy's largest shareholder, Shalva Chigirinsky, said Thursday that the company was in talks to sell a controlling stake to Gazprom.

Sibir, a London-listed company with Russian assets, is offering 50 percent plus one share on condition that Gazprom lets Sibir take control of assets contested by the two companies, Chigirinsky said.

"We've proposed that they put all the assets into one company, Sibir Energy," Chigirinsky said by telephone. "That means 100 percent of Yugraneft and all their shares in the refinery, and in return they get 50 percent plus one share in Sibir Energy," Chigirinsky said.

Sibir has been embroiled in disputes with Sibneft, now Gazprom Neft, over ownership of the Moscow Oil Refinery and Yugraneft, which holds a license to develop the west Siberian oil field South Priobskoye. The deposit is large enough to supply Britain with oil for nine months.

"Gazprom Neft has not received any offer for a controlling stake in Sibir Energy," Gazprom's oil unit said in a statement Thursday. "Gazprom Neft would suggest that managers of the British company are stating their wishes instead of reality."

Andrei Chernykh, a spokesman for Gazprom, declined to comment.

Chigirinsky said Gazprom had not yet approved the deal and that talks have been held up by Gazprom CEO Alexei Miller's illness. Miller has temporarily stepped down from his post while he undergoes treatment for a kidney ailment.

"Miller is sick, and we believe it would not be polite to do this without Miller," Chigirinsky said.

Chigirinsky said Mayor Yury Luzhkov sent a letter to President Vladimir Putin, who in turn asked Gazprom chairman and First Deputy Prime Minister Dmitry Medvedev to settle the dispute with Sibir.

Luzhkov is chairman of the Moscow Oil Refinery, in which the Moscow city government is a shareholder.

Putin forwarded Chigirinsky's proposal for review by the Economic Development and Trade Ministry, which gave "a positive appraisal of the deal," Chigirinsky said.

"There will soon be another meeting between Medvedev and Luzhkov," Chigirinsky said.

"One way or another, the situation will be resolved, and it will be resolved quickly," Chigirinsky said. "The status quo doesn't suit anybody."