No merger between Gazprom, Ukraine's Naftogaz: PM

20th June 2010, Comments 0 comments

Ukrainian Prime Minister Mykola Azarov said Sunday a merger between Russian energy giant Gazprom and Ukraine's state gas firm Naftogaz was not in the pipeline.

Gazprom last month proposed creating a 50-50 joint venture with Naftogaz, calling it a possible first step toward a merger of the two companies.

The proposal came after Russian Prime Minister Vladimir Putin floated the idea of the merger, angering critics in Ukraine who said the move would amount to a takeover of Naftogaz by the much larger Gazprom.

Interfax news agency quoted Azarov as telling Ukrainian television on Sunday there would be no such deal.

"But we will be searching for some sort of organisation" that would allow the two groups to cooperate, he added.

Gazprom chief executive Alexei Miller suggested the joint venture idea after a May 28 meeting in Moscow with Ukrainian energy and fuel minister Yury Boiko.

The two men "discussed questions involving the proposal to merge Gazprom and Naftogaz. The sides agreed this process should come in stages," a statement said at the time.

"The first step could be the creation of a joint venture on an equal, 50-50 basis between the two companies. Now it is necessary to determine the list of assets which could be given to the joint venture from both sides," Miller was quoted as saying.

Moscow and Kiev have moved forward with a flurry of deals since Ukraine's new, Kremlin-friendly President Viktor Yanukovych was inaugurated in February, replacing the staunchly pro-Western Viktor Yushchenko.

Ukraine's pro-Western opposition has expressed fear that Yanukovych will hand over the country's prize assets to its giant neighbour and Soviet-era master Russia as he seeks to pull Ukraine out of a deep recession.

© 2010 AFP

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