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. Last Updated: 07/27/2016

Gazprom Neft Weighs Issuing $1Bln in Bonds

Gazprom Neft may issue up to $1 billion in bonds and raise a club loan as it is studying asset purchases in Russia, Kazakhstan and Slovenia, chief executive Alexander Dyukov said Monday.

Dyukov said the company was considering buying midsized oil firm Russneft, Kazakhstan's Pavlodar refinery and Slovenia's top fuel retailer and the country's fourth-largest listed firm Petrol.

Gazprom Neft has already spent over $1 billion in the past month to amass 34 percent in London-listed Sibir Energy in a move widely perceived as a Kremlin strategy to use the financial crisis to further strengthen its grip over key industries at home and expand its influence abroad.

"Petrol could be interesting. We bought [Serbia's] NIS, and this is 4 million tons of annual oil refining with an option to increase it to 5 million to 6 million. And we are interested in increasing our [retail] network," Dyukov said.

Petrol shares have been rallying in the past week on reports that Gazprom Neft was seeking to buy it, but Dyukov said his company was not holding concrete talks for now.

He said talks were still going on about Russneft -- the first public revelation that Gazprom Neft could become the ultimate owner of the indebted firm, whose shares are now held as collateral with Russia's top lender, state-run Sberbank.

"Russneft is a question of price," Dyukov said.

He also said the company had no plans to increase its stake in Sibir from the current 34 percent after buying out virtually all of the firm's free float.

He said Gazprom Neft was holding talks with the remaining shareholders, who include several Russian businessmen and the government of Moscow, to manage the asset.

Gazprom Neft shares closed down 5.03 percent at 106.03 on the MICEX on Monday.

On Monday, Sibir reappointed Stuard Detmer as its chief executive at the request of Gazprom Neft, reversing last week's management reshuffle, which saw Detmer replaced by Gazprom Neft's top legal expert Igor Tsibelman.

The appointment was made "pending discussions" between major shareholders, Sibir said in a statement Monday.

Tsibelman will now become the first deputy chief executive to Detmer "to ensure the seamless transition of the management of the company," Sibir said.

"Igor Tsibelman's appointment was a [Sibir] board decision. ... It was premature to do it. There is a [standard] procedure of handover, and it should not take place suddenly," said Dyukov, adding that Sibir was likely to get a new CEO -- Tsibelman or somebody else -- within two to three weeks.

(Reuters, Bloomberg)