Financial Times FT.com

Warning on output levels

By Catherine Belton

Published: October 2 2007 03:00 | Last updated: October 2 2007 03:00

Soon after Gazprom finally announced this summer that it had chosen France's Total as a foreign partner to help develop the vast Shtokman gas field, the Russian gas giant chose a St Petersburg shipyard, owned by the son of a businessman close to President Vladimir Putin, to supply rigs.

Gazprom denies its decision on the $2.3bn contract had anything to do with the Vyborg plant's ownership. But critics say giving the contract to a yard that had been at a standstill for 10 years was typical of a growing trend in Russian oil and gas, in which most significant assets - and deals - are concentrated in the hands of a small group of officials close to the president.

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