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Energy

WRAPUP 1-Russia promises privatisation, Gulf SWFs wooed

* PM Putin pledges new privatisation drive * Putin meets heads of Gulf SWFs, investment funds * Russia mulls stake sale in several state companies * Putin says Gazprom’s export monopoly to stay

MOSCOW, Sept 29 (Reuters) - Prime Minister Vladimir Putin promised to launch a new Russian privatisation drive on Tuesday before courting over lunch the heads of some of the world’s largest sovereign wealth funds and money managers.

Several Russian officials have said that Russia, struggling to come out of its worst recession in more than a decade, should embark on fresh privatisation after several years in which the state’s role in the economy has steadily grown.

Putin, who ultimately holds the power to decide, spoke clearly in favour of it for the first time since the financial crisis hit Russia, though no specific timetable was announced.

“As the situation stabilises and the effects of the crisis are overcome, we intend to reduce state involvement in the economy and, even more than that, we will activate the processes of privatisation,” Putin told an investment forum in Moscow.

After the speech Putin had lunch with the heads of sovereign wealth funds from Kuwait, Abu Dhabi and Oman as well as private investment funds.

Putin’s spokesman Dmitry Peskov said executives from TCW Group, one of the world’s largest money managers, Lansdowne Partners, one of the UK’s biggest hedge funds, and German asset manager DWS were at the lunch but declined to give any details.

Earlier this month Putin met David Bonderman, founding partner of TPG, one of the world's largest private equity funds, as well as the outgoing CEO of Morgan Stanley MS.N, which organised some of Russia's biggest IPOs before the crisis.

MINORITY STAKES

First Deputy Prime Minister Igor Shuvalov, who is in charge of the new privatisation programme that will aim to bring in over $3 billion into the budget in 2010 alone, was in Singapore on Tuesday, wooing Asian investors.

The state controls about 60 percent of Russia’s $1.3 trillion economy, according to analysts, many of whom say that such dominance stifles growth.

State asset sales are controversial in Russia after the privatisations of the 1990s gave a tiny group of oligarchs control over some of the country’s biggest and most lucrative raw materials companies at bargain prices.

Economy Minister Elvira Nabiullina said the government is discussing the sale of minority stakes in shipping firm Sovkomflot, agricultural equipment leasing firm Rosagroleasing, as well as in some sea ports and airports.

She added that the sale of a stake in top oil firm Rosneft ROSN.MM was not on the agenda although Finance Minister Alexei Kudrin said Russia is planning gradually to reduce its stakes in large state oil companies.

Kudrin said the government will cut its stake in state- controlled lender VTB VTBR.MM but would not reduce it to below 50 percent over the next 5 years. Privatisation in other sectors, such as telecoms, is part of the post-crisis strategy, he said.

The renewed privatisation drive could materialise in the next three years, according to Kudrin, but he added that the state could increase its stakes in troubled automotive and defence firms during the financial crisis.

Despite his support for privatisation, Putin reiterated that the monopoly position of Russia's biggest company Gazprom GAZP.MM will remain unchallenged for years to come.

“You can always wait,” a smiling Putin told a foreign investor who had asked during a panel discussion if investors could expect Gazprom to lose its monopoly position as gas exporter.

“In the near future we will try to liberalise the domestic gas market..., will try to liberalise access to pipelines. But the monopoly for sales on external market will be maintained...in the medium term for sure,” Putin said. (Writing by Gleb Bryanski; Editing by Andy Bruce)

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