OREANDA-NEWS. October 02, 2013. OJSC ALROSA and Rosneft Oil Company have signed an agreement for the sale of ALROSA’s gas assets, consisting of the companies operating in the Yamalo-Nenets Autonomous District and the Republic of Sakha (Yakutia).

The official signing ceremony took place in the presence of the Prime Minister of the Russian Federation Dmitry Medvedev in the framework of the XII International Investment Forum in Sochi. The document was signed by the President of ALROSA Fedor Andreev and President and Chairman of the Management Board of Rosneft Igor Sechin.

Total transaction value is estimated at \\$1.38 billion. The extractable reserves of ALROSA’s gas assets exceed 200 bln. cubic meters of natural gas and 40 mln. tons of liquid hydrocarbons, under the Russian reserves classification.

OJSC ALROSA plans to use the transaction proceeds to repay the Group’s outstanding debt.

“The decision to sell the gas assets was made in pursuance of ALROSA Group’s strategy which focuses on boosting diamond production capacities and gradual divestiture of non-core assets. Rosneft Oil Company has enormous expertise in oil and gas field development and already has practical experience working with Urengoy-based gas companies. We believe that the arrival of Rosneft, as a new shareholder, would give a boost to further development of ALROSA’s oil and gas assets in the Yamalo-Nenets Autonomous District and Western Yakutia”, said Fedor Andreev, President of ALROSA.

“Gas business development is one of Rosneft’s strategic priorities and acquisition of ALROSA’s oil and gas assets is perfectly in line with this strategy. It would also strengthen the positions of Rosneft in the Russian Far East – a region of great significance to the Company”, Rosneft President and Chairman of the Management Board Igor Sechin said.

The completion of the acquisition by Rosneft of ALROSA’s gas assets is subject to the parties’ obtaining the requisite corporate and regulatory approvals.