BASF producing natural gas in Siberia with Gazprom

18 December 2007

Mumbai: BASF AG and Russias OAO Gazprom today officially launched production operations at the Russian natural gas field Yuzhno Russkoye, marking the first ever direct participation of a German company in the production of natural gas in West Siberia.

In an official ceremony at the Gazprom headquarters in Moscow, Alexey B. Miller, chairman of the board of executive directors of OAO Gazprom, and Eggert Voscherau, vice chairman of the board of executive directors of BASF, pressed the button to launch production operations at the Yuzhno Russkoye gas field together with Dmitry A. Medvedev, first deputy prime minister of the Russian Federation and chairman of the supervisory board of OAO Gazprom, and the Germany foreign minister, Frank-Walter Steinmeier.

Shortly beforehand, the completion of work at the gas field was confirmed in a live broadcast from Siberia.

BASFs shareholding in the gas production in Siberia is part of an assets swap which has now been completed. The wholly owned BASF subsidiary Wintershall received 25 per cent minus one share of the company OAO Severneftegazprom (SNGP), which holds the licence for the Yuzhno Russkoye natural gas field in West Siberia.

In addition, Wintershall received a non-voting preferred share in the original capital of OAO Severneftegazprom, which gives BASF a 35 per cent share in the economic rewards of SNGP.

In return, Gazprom has increased its shareholding in the natural gas trading joint venture WINGAS GmbH from 35 to 50 per cent minus one share. Gazprom has received a 49 percent share in a Wintershall subsidiary that produces oil in two onshore concession areas in Libya.