Research Update: JSC Gazprom Neft Outlook Revised To Negative On Possible Acquisition Of SeverEnergia Stake; 'BBB-' Rating Affirmed Oct 10

Standard & Poors, October 2010

Abstract
Russian oil company Gazprom Neft plans to acquire a 51% stake in Severenergia from OAO Gazprom via a 50/50 joint venture with OAO NOVATEK. Although the transaction price has not yet been disclosed, we understand that Gazprom recently paid $1.6 billion for the 51% stake in the asset, so we expect Gazprom Neft's share of the acquisition cost to be at least $800 million. We are revising the outlook on Gazprom Neft to negative, reflecting our view that its acquisitive policy will put pressure on its liquidity, cash flows, and future investment needs. On Oct. 28, 2010, Standard & Poor's Ratings Services revised its outlook on Russian vertically integrated oil company JSC Gazprom Neft to negative from stable. At the...

Companies mentioned in this report are:
- Gazprom Neft JSC
- Gazprom OAO
- OAO NOVATEK

Action: Outlook: Negative

Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.

Product Type: Research Update
Research updates complement media releases. They offer more depth and detail than summary analyses by incorporating all information published in the media release. They are more up to date than summaries in that they are published simultaneously with media releases.

- Gazprom Neft JSC
- Gazprom OAO
- OAO NOVATEK

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