Rosneft surpasses Gazprom as Russia’s valuable firm

Bloomberg

Rosneft OJSC became Russia’s most valuable company as its market capitalization exceeded that of natural gas exporter Gazprom PJSC for the first time since its shares began trading in 2006.
Rosneft shares rose 4.8 percent in London by 12:02 p.m., boosting the value of Russia’s largest oil producer to $52 billion. Gazprom gained 0.3 percent, raising its market capitalization to $51 billion. In Moscow, Rosneft advanced 3.4 percent, while the gas producer was
little changed.
The state-controlled oil company has narrowed Gazprom’s lead from more than $250 billion in 2008, as it expanded through the acquisitions of assets from Yukos Oil Co., which the government sold at forced auctions over tax claims, and BP Plc’s joint venture in Russia. Gazprom has faced rising competition in the domestic gas market, including from Rosneft, and the lowest prices in more than a decade in Europe.
“Rosneft is growing its free cash flow and should do better in a stronger oil price environment,” Ildar Davletshin, an energy analyst at Renaissance Capital, said by e-mail. “Gazprom’s free cash flow is on the way down and unlikely to reverse soon.”
Gazprom still dwarfs Rosneft by output. Its oil and natural gas output are equivalent to about 8 million barrels a day, while Rosneft pumps roughly 5 million barrels a day.