Economics minister Gref lauds Rosneft IPO, says no Gazprom float

STRELNA (near St. Petersburg), July 15 (RIA Novosti) - Russia's economic development and trade minister praised Saturday the initial public offering of oil company Rosneft but said energy giant Gazprom [RTS: GAZP] was not about to follow suit.

State-run Rosneft closed the books on its IPO Friday, placing 1.4 billion ordinary shares (GDRs abroad) in Moscow and London with a total worth of $10.4 billion.

German Gref praised the results of Rosneft's IPO, including the number of shares Russian nationals bought.

"I positively assess the results of Rosneft's IPO. Some 125,000 Russian nationals have become the company's shareholders," Gref told journalists. "Shares worth some $750 million were placed among the population. This is unprecedented. I hope we will not disappoint people's expectations."

Russian retail investors filed over 115,000 bids, a record for Russian private investors in a company. Russia's Sberbank savings bank acted as the main coordinator and manager of the IPO in Russia.

Asked about strategic investors, Gref said no companies had bought large stakes in Rosneft.

On Friday it was reported that Rosneft and parent company Rosneftegaz had determined the price of one share and one Global Depositary Receipt (GDR) during the IPO at $7.55. The volume of bids exceeded the volume of shares being offered by 50% and totaled over $15 billion, a record for Russia.

Demand had the following structure: strategic investors - 21%, international investors from the U.S., Europe and Asia - 36%, Russian investors - 39%, Russian retail investors - 4%.

But Gref, known as one of the government's free market champions, said there were no plans for Gazprom to follow the oil company's example.

"In the gas sector we have one company and are not planning to hold an IPO. We only just bought a state package in it and are paying for it with the Rosneft IPO," he said.

The state bought a stake of 10.74% in Gazprom for $7.5 billion in June 2005.

However, Gref said that plans were being drafted to hold IPOs for other Russian energy and automotive companies.

He also said that Russia needed to raise domestic prices for natural gas quickly in the next five years, something that the European Union has demanded for many years.

"To stimulate energy saving and make our economy more effective, we need to raise natural gas tariffs quickly. We will be doing it this year and next year, and then for another three years," the minister said.

Gazprom chief executive Alexei Miller said in late June that the energy giant wanted to make domestic supplies of natural gas as profitable as supplies to Europe.

A company official said earlier the gas giant could lose 30 billion rubles ($1.1 bln) in 2006 and 14 billion rubles ($517.4 mln) in 2007 on domestic gas supplies, following losses of 8 billion rubles (almost $300 million) in 2005.

Speaking at an annual shareholders meeting, Miller said: "Natural gas prices on the domestic market must make consumers increase the efficiency of its use, and facilitate the development of competition between alternative fuels and the establishment of optimal price ratios for natural gas, coal and fuel oil."

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