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Gref warns against Gazprom industrial grab in Russia

Russian Economy Minister German Gref warned the government to curb gas-export monopoly OAO Gazprom's expansion into other industries, saying it could „throw the country back many years.”

Russia shouldn't „go to extremes,” using Gazprom assets to buy controlling stakes in companies in all sectors of the economy, Gref told a conference in Krasnoyarsk, Siberia today. „If we do, we'll not only get a government monopoly of the 19th century, but also a state-capitalism monopoly that will throw our country back many years.” Gazprom, the world's largest gas producer, in December gained control of Sakhalin-2 from Royal Dutch Shell Plc after the government threatened to derail the country's then-largest foreign energy project. The state-run company is also expanding its media holdings and moving into power generation and coal and uranium mining. Russia, the world's largest energy exporter, is heading for a ninth year of economic growth. The annual pace of inflation narrowed to 8.2% in January, the slowest pace in eight and a half years. Gazprom's lending arm, ZAO Gazprombank, said in an e-mailed statement today it bought 52% of OAO Morion, a St. Petersburg-based telecommunications equipment producer whose clients include the Federal Security Service, the main successor to the Soviet KGB, and the Interior Ministry. The bank didn't say how much it paid for Morion, which had sales of $14.4 million last year. Gazprombank said yesterday that it loaned companies in Russia's nuclear industry $1.1 billion last year and plans to further expand in the sector through a strategic agreement with uranium miner and fuel trader Tenex. Those companies include ZAO Atomstroyexport, the state atomic power plant builder in which Gazprombank owns 49.8%. „Instead of acquiring new assets and creating a state monopoly conglomerate,” Gazprom should concentrate on developing new gas deposits and meeting surging domestic demand for the fuel, Gref said today. (Bloomberg)