Sibneft stake is the key to Russian oligarch's fortune

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The Independent Online

Roman Abramovich's Sibneft emerged as one of Russia's biggest and most westernised oil and gas companies after the controversial privatisation of the country's state-owned industries in the 1990s.

It has proven reserves of 4.6 billion barrels of oil, with refineries in Omsk and Moscow that pump out more than 500,000 barrels of oil products per day.

Although Boris Berezovsky was the "oligarch" behind the formation of Sibneft in 1995, within a few years Mr Abramovich, billed as Britain's richest man by The Sunday Times, has emerged as the power behind the company.

Mr Abramovich appears to remain very much in favour with the Kremlin, unlike Mr Berezovsky and some other oligarchs. Just in case though, Mr Abramovich has bought himself some political insurance by taking public office - in 2000 he was elected Governor of Chukotka, a remote region in the far east of Russia.

Mr Abramovich, 37, now spends much of his time in the UK, with homes in London's Belgravia and a 440-acre estate in Sussex. He has an estimated fortune of £7.5bn.

The tycoon does not actually sit on the board of Sibneft - Mr Abramovich's governorship precludes that - but he is thought to own 46 per cent of the company's shares, worth an estimated $10bn (£5.6bn). His business associates own most of the remaining shares.

Last year, Sibneft announced a giant merger with its rival Yukos in a deal that would have created Russia's biggest energy company. However, although the deal has now technically completed, Sibneft is desperately trying to force Yukos to unwind the transaction.

Yukos, which is under attack from the Russian authorities over alleged tax evasion, is the senior partner in the merger and is fighting Sibneft's attempted separation.

It is believed that Mr Abramovich and his associates want, instead, to sell a significant stake in Sibneft to a foreign oil major, such as Total or ExxonMobil. Talks with international players are said to have begun, but before a sale can take place Sibneft would first need to extricate itself from Yukos.

Mr Abramovich, who bought Chelsea Football Club last year, eclipsed Mr Berezovsky's influence politically too by the end of the Yeltsin era. Mr Berezovsky, having fallen out with the current Russian government of Vladimir Putin, is now in exile in London.