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18 Feb, 2008 03:25

West Siberian & Alliance sign oil merger

West Siberian and the Alliance Group have signed a merger agreement creating a new independent oil company operating in Russia and Kazakhstan. West Siberian is currently an upstream producer, and Alliance is primarily engaged in refining and processing.

Analysts say the merger is a good example of how companies should combine their resources.

Under the merger Russian oil company Alliance will become a wholly-owned subsidiary of Sweden's West Siberian.

Registered in Bermuda and listed in Stockholm, West Siberian brings to its Russian partner increased access to international investors. The production of both companies is currently focused on west Siberia and the Russian Far East. With joint reserves estimated at almost half a billion barrels, the priority is meeting booming Asian demand.

Aleksandr Fetisov, Managing Director at East Kommerce, says this deal is an example of good co-operation in the oil market. According to him, this merger reinforces Alliance's position as an oil exporter to Asian countries. “The unified company will bring together the partners' upstream (oil production) and downstream (refining and marketing) assets, producing a synergic effect,” he said.