19 Apr 2011 17:56

Akhmedov wants higher price for Northgas stake

MOSCOW. April 19 (Interfax) - Farkhad Akhmedov wants Inter RAO UES to pay $1.8 billion for his 49% stake in Northgas rather than the $1.5 billion agreed late last year.

Akhmedov told Interfax that he had sent a letter to Inter RAO, proposing that the price agreed on at the end of last year be reviewed and increased to $1.8 billion.

Akhmedov said he might decide against selling the 49% of Northgas to Inter RAO if the talks reach a dead-end.

He said the market situation had altered since the agreement was reached - oil prices had risen, and liquids sales generate 40% of Northgas's revenue. Also, demand for gas has risen due to the disaster in Japan, he said.

Akhmedov owns the 49% of Northgas via a firm called REDI. He told Interfax that DeGolyer and MacNaughton recently valued REDI's attributable Northgas reserves at $3 billion, and that one of the major international investment banks valued the stake at $2.4 billion in April.

Akhmedov said Northgas was a "very good asset with very good growth prospects," and that he was even prepared to buy Gazprom's 51% of Northgas if the latter decides to sell.

The $1.5 billion valuation of REDI's stake in Northgas was made assuming oil priced at $75 per barrel.

Gazprom, which owns 51% of shares in Northgas, has right of first refusal to buy shares in the company. However, a source in the energy industry told Interfax recently that Gazprom is not interested in REDI's stake and in fact might sell its own stake.

Northgas was formed in 1993 to develop the Neocomian horizons of the North Urengoi field. Gazprom originally had a 51% stake in the company that was later diluted in a supplementary share issue. Gazprom began working to regain a controlling stake in the company in 2002, a year after current CEO Alexei Miller was appointed to the top spot in the gas giant.

Urengoigazprom filed suit to have the supplementary share issue canceled and also sought to revoke agreements with Northgas covering pipeline shipments, delivery of water and electricity and provision of medical services. In response, Akhmedov changed the company's form of incorporation a number of times, and also switched its registration from Yamalo-Nenets autonomous district to Krasnodar, which he represented in the Federation Council. The litigation ended in 2005, when Gazprom regained a controlling stake in Northgas.