Earlier reports had Alrosa in talks with Yukos on purchasing its share in Sakhaneftegaz.
According to Alrosa's press release, the government of the Republic of Sakha (Yakutia)ealier this year proposed Alrosa purchasing Sakhaneftegaz's oil and gas assets, specifically Yakutgazprom. Alrosa immediately started studying the prospects for such investment and initiated talks with possible counteragents, including Sakhaneftegaz's shareholders.
"Such an approach was inspired by the recommendations of Alrosa's main shareholders, the Russian government and the government of the Republic of Sakha, to diversify the company's activity under a long-term development program," Alrosa said.
Although the talks with Sakhaneftegaz shareholders were a success, the company's managing board arranged a controversial issue of Yakutgazprom shares, which Alrosa feared could lead to the shareholders' losing control over Yakutgazprom and, consequently, suffering losses. In light of this, Alrosa withdrew from the deal fraught with legitimate legal suits.
Sakhaneftegas was established in 1992. The government owns a 25% stake in the company. Sakhaneftegaz and its subsidiaries are authorized to develop a number of major fields in the Leno-Vilyuiskaya gas-bearing province. Natural gas accounts for the bulk of the company's income.
The company develops more than 1-trillion-cubic-meter proven gas field reserves, with oil reserves of approximately 180 million metric tons. On average, the company extracts some 1.5 billion cubic meters of natural gas per year.
Alrosa is one of the world's largest diamond producers, accounting for 23% of global diamond extraction. In 2004, the company put out $2.481 billion worth of major produce, including stones worth $130.9 million.
The Russian Ministry of Property has a 37% stake in Alrosa, while the Ministry of State Property Management of the Republic of Sakha holds a 32% stake and the company's staff picks up 23%. Eight Yakutian regions own 8% of the company's shares.
