S&P: Gazprom on watch developing

Standard & Poor's said it placed its BB- long-term corporate credit rating and senior unsecured debt ratings on OAO Gazprom and related entities on CreditWatch developing following the group's announcement that it is to bid for Yuganskneftegas, a production subsidiary of OAO NK Yukos (CC/Watch Negative/--).

"The CreditWatch placement reflects the uncertainties about the future strategy of Gazprom and the policy of its main shareholder, the Russian government, regarding this and other large-scale acquisitions, Gazprom's debt appetite and the group's ability to rely on the Russian government's financial support in the future," said S&P credit analyst Elena Anankina.

S&P said the ratings on Gazprom could be raised if there is strong evidence of government support, particularly when the government implements its plan to increase its shareholding in the group from 38% to 51% by exchanging the assets of state-owned OJSC Oil Company Rosneft (B/Developing/--) for Gazprom's treasury stock.

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