Interfax citing Mr Igor Sechin Russian Deputy Prime Minister of Russia as saying that, the Russian government is not yet working on merging the state oil companies OJSC Transneft and OJSC Zarubezhneft.

He said that "I haven't heard about this proposal."

At the same time, Mr Sechin said that the government could study this issue. He said that "There are some things I can say immediately according to its statue, Transneft does not produce hydrocarbons, but Zarubezhneft does. The issue of how this will correlate needs to be studied. Besides that, it's not clear how Zarubezhneft production assets in Vietnam could be connected with Transneft."

Transneft spokesman Mr Igor Demin told Interfax that the idea of merging the two companies is unrealizable. The proposal was made at an Economic Development Ministry meeting on privatization, but there was not sufficient justification for it.

Mr Demin said "This is from the realm of fantasy. It is correct that there are a lot of disparate circumstances. Merging a production and a transport company would require changes not only to the statutory documents, but also changes in the legislation. Under the current law, Transneft, as a monopolist, does not have the right to develop fields."

As reported, the idea of Zarubezhneft inclusion into Transneft was discussed at a government meeting dedicated to state company privatization in November of last year.

(Sourced from Interfax)