Gazprom stake up for auction

The Russian government has announced that it is planning to sell a 2.5 per cent stake in Gazprom for $651m. The stake will be sold as a single lot by auction, and will help the government cope with its huge budget deficit.

The deal is likely to be concluded by the end of the year. Ruhrgas, the German utility and Gazprom`s biggest export customer, is considered to be the most likely bidder for the stake.

Gazprom is also reported to be considering a venture with Lukoil, the country`s largest oil company, to exploit new reserves at home and abroad. A deal would probably involve a production sharing agreement and would enable both companies to cut costs.