Russian Giant Eyes Ukraine Joint Venture

MOSCOW, Russia -- Russian energy giant Gazprom yesterday proposed creating a 50-50 joint venture with Ukraine's state gas firm Naftogaz, calling it a possible first step towards a merger of the companies.

Gazprom's Alexei Miller

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

Gazprom chief executive Alexei Miller suggested the idea after meeting Ukrainian Energy and Fuel Minister Yury Boiko in Moscow, the company said.

They "agreed this process should come in stages," Gazprom said.

"The first step could be the creation of a joint venture on an equal, 50-50 basis," Miller said in a statement.

"Now it is necessary to determine the list of assets which could be given to the joint venture from both sides," Miller added.

Moscow and Kiev have moved forward with 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.

Source: Gulf Daily News