Rosneft buys Itera stake for $2.9 billion to expand gas business

OAO Rosneft (ROSN) acquired full control of OOO Itera, an independent natural gas producer and trader, buying the remaining 49 percent for $2.9 billion as the country’s biggest oil company expands.

“Gas business is one of the top priorities,” Rosneft Chief Executive Officer Igor Sechin said today in a statement. The deal will boost growth and “will ultimately increase the total capitalization.”

State-controlled Rosneft is challenging OAO Gazprom (GAZP), the world’s biggest gas producer, with plans to double its share of the domestic market and sell liquefied natural gas to Asia. President Vladimir Putin has called for the government to loosen Gazprom’s monopoly with a gradual liberalization of LNG exports.

The price of the 49 percent stake “implies that Itera alone was valued at $1.40/boe of reserves,” Luis Saenz, head of equities at Russian brokerage BCS Financial Group, said by e-mail. That compares with $3.80 per barrel of oil equivalent of reserves for Rosneft, he said. “This is value enhancing.”

Rosneft and Itera last year teamed up to produce and sell gas, with the oil producer acquiring 51 percent of the joint venture in exchange for the Kynsko-Chaselsk field and $173.4 million in cash.

Rosneft shares rose 0.5 percent to 230.49 rubles at 2:43 p.m. in Moscow, the highest level on a closing basis since June 25.