THE Russian energy giant Gazprom has outlined plans to become the world’s first company with a stock-market value of a trillion dollars, a move that would make it twice the size of Exxon Mobil.

Gazprom, which is majority-owned by the Russian state, would need to quadruple its current $251 billion (£125 billion) market value to achieve the goal. But Alexander Medvedev, deputy chief executive, told The Sunday Times: “It’s not just a nice figure.”

Medvedev said the removal of gas-price controls in Russia, a revaluing of its reserves by western markets, the introduction of cost controls and a programme of diversification and acquisitions would drive Gazprom to the $1 trillion threshold. He did not give a specific timetable for achieving the target, but it is understood that Gazprom executives believe it can be achieved within five to seven years.

Details of the Russian group’s aggressive growth plans will add to western unrest about the power of the group, which critics say has been used by the Russian government as an instrument of foreign policy.

Gazprom holds 17% of the world’s known gas reserves and supplies about a quarter of western Europe’s gas. Last year it withheld supplies to Ukraine after a dispute over prices, a move that threatened disuption to central European gas users.

Medvedev dismissed suggestions that the company was a government tool as “absurd”. “The state has a majority stake, but we’re a listed group, with the remaining shares in the hands of private investors,” he said. The state’s controlling interest in Gazprom was in line with the practice in Norway, where the government had retained control of strategic oil and gas assets, he added.

European consumers had nothing to fear from Gazprom’s strong position. “There is this myth that we are making all this investment in Europe so we can squeeze the customers. That’s ridiculous. We don’t invest huge amounts of money to squeeze people. It’s a mutual dependence – we are heavily dependent on our European customers.”

Gas prices in Russia are strictly controlled, but by 2011 consumers will have to pay the same price as export customers, minus allowances for transport and duties. Medvedev said Gazprom’s “rough calculation” was that this would add $32 billion to annual revenues. “This is not properly appreciated by everybody – and it’s why I agree with some investment-bank estimates that the fair value of Gazprom shares by 2011 will be double what they are today.”

Medvedev said further boosts to the stock-market value would come from increased efficiencies and labour productivity. “We started on this path only five years ago. Last year our oper-ational costs dropped by 5%, and for Gazprom 5% is a significant number.”

The group also plans to diversify into oil and power generation, and into the manufacture of liquefied natural gas, which would eventually make it a big player in North America, and Asia. Medvedev confirmed the group was examining a spin-off of Gazprom-bank, which has become Russia’s third-largest. He said the group was considering a float, or the introduction of a strategic investor.

Gazprom is negotiating a strategic partnership with BP. The talks arose out of a dispute over the future of the Kovykta gas field, which was being developed by TNK-BP, BP’s Russian joint venture, but which has now been sold to Gazprom.

On Friday, Gazprom announced the purchase of the British group Natural Gas Shipping Services, the sister company of Pennine Natural Gas, which it bought last year. The pair sell gas to commercial customers, and now have 4% of the total market, with a plan to grow to 10%. Medvedev said Gazprom would also offer electricity to UK customers as well as a “carbon-neutral” gas package.

Times Recommends

• Food prices rise 8.3% on soaring fish and meat
• Car sales crash as economy hits skids
• House prices fall but Bank leaves rates on hold