Russia to provide $9 bn to oil, gas majors

October 14th, 2008 - 2:57 pm ICT by IANS  

Msocow, Oct 14 (RIA Novosti) Russia would provide $9 billion to the country’s four top oil and gas companies, including Russian-British joint venture TNK-BP, to refinance their foreign debt, a Russian business daily reported Tuesday. State-run oil company Rosneft will receive $4.2 billion of the sum.

According to Kommersant daily, the decision was taken Saturday during a meeting between oil and gas company representatives and deputy prime minister Igor Sechin, who oversees the energy sector.

Gas monopoly Gazprom would receive $1 billion, the country’s largest independent oil producer LUKoil, $2 billion and TNK-BP, $1.8 billion.

The state earlier granted the oil producers an estimated $5.5 billion in tax breaks.

On Sep 24, the four oil and gas majors, which account for 70 percent of the country’s oil and 90 percent of gas production, sent Prime Minister Vladimir Putin a letter asking for a total of $80 billion to pay off their foreign debts and finance strategic projects.

Putin said Friday the government would disburse up to $50 billion for companies to refinance their foreign debt.

He also said Monday that companies should be offered alternative debt refinancing loans as a way of “saving Russian enterprises from being sold off at rock-bottom prices, which do not reflect their true value.”

Russia has been facing acute liquidity crunch in the wake of the global market crisis.

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