UAE’s Mubadala to take stake in subsidiary of Russia’s Gazprom

The Russian oil subsidiary’s combined production stood at 1.64 million tonnes in 2017

Abu Dhabi’s state-owned Mubadala Investment Company has acquired a 44 per cent stake worth at least $271m in an oil subsidiary of gas giant Gazprom, the Russian company said on Thursday.

Middle East oil producers and Russia have forged closer ties since striking a deal to cut global crude output in a bid to remove a glut in supplies. The pact between OPEC, Russian and other producers has been implemented since January 2017.

Read: Russia says looking at joint oil organisation with OPEC

Gazprom said its board of directors had agreed to sell 44 per cent of its subsidiary Gazprom Neft-Vostok to Mubadala Petroleum, which is owned by the Mubadala fund in the United Arab Emirates.

Russia’s Kommersant newspaper had reported talks on the deal in February, saying Gazprom Neft-Vostok produced oil at six fields in Western Siberia’s Omsk and Tomsk regions.

The Russian oil subsidiary’s combined production declined by 3 per cent to 1.64 million tonnes in 2017.

The stake in Gazprom Neft-Vostok would be sold for at least $271m, according to Gazprom. Russian Direct Investment Fund (RDIF) acquired almost 5 percent.