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E.ON proposes Gazprom shares for gas stake-paper

German utility E.ON has proposed exchanging a $7 billion portion of its stake in Russian gas monopoly Gazprom for a stake in the Yuzhno Russkoye gas field in the Arctic, a Russian newspaper reported.

Kommersant business daily, citing unnamed sources within both companies, said on Wednesday E.ON was seeking a stake of 25% minus one share in Severneftegaz, the operator of the field in the northern Russian region of Yamalo-Nenets.

Yuzhno Russkoye, with total gas reserves in excess of 600 billion cubic meters, has been the subject of talks between E.ON and Gazprom for several years. The German company had earlier proposed swapping some European assets for a stake in the field. E.ON owns 6.4% of Gazprom. A $7 billion stake would equate to just over 2% of the gas giant’s share capital. Both companies declined to comment on the report, but Kommersant said two sources within Gazprom confirmed the company had received a written proposal from E.ON.

German chemicals group BASF owns 25% minus one share in the field through its Wintershall unit. In return, Gazprom increased its share in a jointly held German gas trading firm, Wingas, to 50% less one share from 35%. (Reuters)