* The decree capped foreign ownership of Gazprom shares to 20%, and limited this to American Depository Shares (ADS) traded in London and New York.
* Gazprom ADS (American Depository Shares) trade at a higher price than local common shares, and make up a paltry 3% of the company's current non-local traded free float.
* Market estimates suggest that as much of 10% of Gazprom shares are owned by foreign entities through "gray schemes", grudgingly tolerated by the government and Gazprom.
* The company's share liberalization plan envisions up to 49% of Gazprom shares will be publicly traded with no restrictions - the government will retain its recently acquired majority control of the company.
* Holding 20% of the world's natural gas reserves, producing 85% of Russia's gas and 16% of global output, supplying a quarter of the western European market, and, importantly, accounting for up to 25% of federal tax receipts, Gazprom is expected to become an attractive investment target.
* Share liberalization will result in a huge increase in demand for the company's stock, and Gazprom will become Russia's biggest company by market capitalization. It could even become one of the most liquid emerging-market stock, after South Korea's Samsung Electronics, and very close to PetroChina.
* With a current market capitalization of $124 billion, Gazprom is priced much lower that its vast reserves of 114 billion barrels of oil equivalent would suggest. Judging by its international peers, in term of prices and reserves, Gazprom's market capitalization should be in the region of $300 billion.
* Investors know this, and will aim to profit from Gazprom's current low valuation. A few examples suggest the kind of upside investors are looking for: the shares of Russia's largest oil producer LUKoil trade at $2.40 per barrel of reserves, and Sibneft traded at $3.13 per barrel before Gazprom announced its intention to buy a super-majority stake in the company; China paid about $10.60 per barrel with its purchase of PetroKazakhstan, and Western oil majors are priced at between $16 and $18 per barrel of reserves. For Gazprom, the current cost of oil equivalent is $1.09 per barrel.
* On December 9, 2005, Russia's lower house of parliament passed a law lifting the "ring fence" from around common shares in the energy giant Gazprom and ending foreign ownership restrictions. A total of 335 State Duma deputies voted for the law, with 80 against, and no abstentions. The bill will be sent to the Federation Council, the upper house, for approval and later to be signed by President Putin.
