Russia's pipeline monopoly takes over oil product transit firm

Russian Prime Minister Mikhail Fradkov has signed a resolution on merging the state-controlled crude pipeline operator Transneft with the state-run oil product transit company Transnefteprodukt, the government's press office said Tuesday according to RIA Novosti. Analysts say the merger is likely to raise the companies' efficiency and cut independent producers' expenses on oil and petroleum product transportation. Under the resolution, the government has contributed 100% of Transnefteprodukt's stock to Transneft's charter capital as payment for the pipeline monopoly's newly-issued shares, the press office said.

After the merger, expected to take five months, the government will hold at least 75% plus one share in the united company.