Sunday, February 12, 2006

Gazprom creates nuclear subsidiary.

The Russian energy giant Gazprom ,the worlds third largest by market capitlisation after Exxon and Shell, but the largest by energy reserves has announced the creation of a nuclear subsidiary to build and operate nuclear power plants through its banking subsidary Gazprom Bank.

Russian business daily reports...

The Russian government is set to firmly take charge of the nation's nuclear industry as state-controlled Gazprombank, which recently consolidated control of nuclear power engineering monopoly OMZ, has announced plans to delist the company and convert it into a closed corporation.

The company, also known as the Uralmash-Izhora Group, will probably become part of a new vertically integrated group already christened Atomprom. The group is going to be involved in the full civilian nuclear cycle - from uranium production through engineering and construction to nuclear waste disposal.

"Conceptually, the OMZ restructuring probably has to do with its nuclear arm's presumed role in the nuclear industry development project announced by the head of the Federal Agency for Nuclear Power," Troika Dialog analyst Gairat Salimov said. "OMZ's nuclear reactor case unit is going to receive 10% of the $60-billion order. From 2010, the increase in orders will raise OMZ revenues to $500 million and market capitalization to $1 billion," he added.

The government has been using gas monopoly Gazprom and its subsidiaries to create a state-owned nuclear monster, experts say, citing the 2004 Gazprom acquisition of a controlling stake in Atomstroiexport, the nuclear machinery export monopoly. "It became clear last year that power generation engineering is a promising business; the Siemens bid for Silovye Mashiny was a signal that the West had seen profit in manufacturing industries," said Igor Vagan, chief communications officer for Motovilikhinskie Zavody, a defense producer. "In Russia, however, you need to be a vertically integrated system to obtain the highest profit, and what we see between Gazprom and OMZ, and between UES and Silovye Mashiny, is just that."Vagan also hinted that the government could be consolidating promising properties with the intent to privatize them later at a higher price.

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