The Irish Independent reports that Bank of Ireland's private banking division expects to take in about €1bn from wealthy Irish investors this year, the bank said yesterday.

Mark Cunningham, the head of private banking, said that the amount of Irish money flowing into global equity markets is accelerating by more than 50pc a year, adding that investors are looking for better value in the face of slower returns from the international property market.

After growing by 148pc between 2004 and 2005, investment in property is now growing at an annual 34pc.

Against this, investment in equity markets jumped from a growth rate of 16pc to 57pc over the same period.

"In the past year or so our clients have been increasing their weighting of investments into equity markets, with our funds delivering in excess of 20pc last year," said Mr Cunningham.

The bank is also tipping the property market in France, particularly Paris, and the Nordic countries, where Stockholm is the pick of the major cities.

Office lettings in Paris are running at twice the level of those in London, the bank said.

While London is deemed overly reliant on the financial services industry, the strength of the Parisian office market is put down to the diversity of potential clients, with major lettings to firms in the defence, IT and banking sectors.

Mr Cunningham said the increased interest in equity markets may mark a turning point as wealthy families adopt the investment habits practised in other countries.

"We anticipate that this trend towards longer-term diversified wealth management will be increasingly the norm for wealthy families here, just as it is across Europe and the US," he said.

As far as property is concerned, director of banking Peter Collins said higher interest rates meant investors would be looking to rental growth as a means to drive up the value of their investments. New markets which the bank is touting for its clients include Switzerland, Belgium, the Netherlands, Estonia and Malaysia.

The best high-risk investments are to be had in Asia.

The Irish Independent also reports that building contractors on the troubled Dublin Port Tunnel are expecting to take a massive hit on the behind-schedule project when it is eventually completed.

It also said the construction company's profit targets have been cut because of "deterioration in the gross margin on completed construction associated with mounting construction losses on the Dublin Port Tunnel."

The Irish Times reports that the European Commission yesterday accused Microsoft of illegally crowding out the media player developed by its chief rival Real Networks.

On the second day of Microsoft's appeal at Europe's second highest court against a landmark anti-trust ruling made by the EU executive, commission lawyer Per Hellstrom said Microsoft's 1999 decision to bundle its own media player into Windows crushed Real Networks player.

"How can you compete with ubiquity," asked Mr Hellstrom, who pinpointed Microsoft's policy of tying its software into its operating system - which is used by 95 per cent of the world's desktop computers - as a key reason that Real Player has lost its lead in the market for media players.

"They [ consumers] are less likely to choose other media players because they already have one," said Mr Hellstrom at the hearing at the European Court of First Instance in Luxembourg. Microsoft disputed the allegation, arguing that competition in the market for media players had actually improved since 1999. It also strongly criticised the commission's antitrust ruling in March 2004 that forced the US software company to provide a version of its operating system without Microsoft's own media player installed.

The issue of bundling software applications such as media player into Windows is crucial to this case and Microsoft's future business model. The commission has already issued a warning to the firm about bundling critical new software applications in its next generation of Windows, Vista, to boost its monopoly.

The Irish judge on the 13-strong judicial panel, Judge John Cooke - who is due to write the draft judgment on the hearing - asked a series of questions of Microsoft and the commission on the issue of bundling media player into Windows.

Judge Cooke also honed in on several internal Microsoft memos offered to the court, which appeared to show that the company had decided to engage in tactics that critics compared to Microsoft actions found illegal by US courts. He asked whether the memos showed bundling was a "strategy to gain market share".

Microsoft lawyer Jean-Francois Bellis dismissed the memos, saying it was easy to interpret "just a few lines taken from a few isolated documents".

Today and tomorrow, the judges will review the commission's action over what it says was Microsoft's failure to provide information rivals needed to create software able to run with Windows as smoothly as Microsoft's own products.

Microsoft will argue that it has given plenty of server software information and that providing more would infringe its intellectual property rights over innovations that it has worked long and hard to develop.

The Irish Times also reports that a scheme under which two directors of a construction company received some £600,0000 in tax-free dividends was a tax avoidance scheme involving a misuse of export sales tax reliefs, the High Court ruled yesterday.

The Revenue Commissioners had claimed the scheme was "far from being a normal use" of export sales relief provisions.

Mr Justice Thomas Smyth found that a complex arrangement under which Michael O'Flynn and John O'Flynn each received income of £298,000 in January 1992 in the form of tax-free export sales relief (ESR) dividends, funded by the write-off of a loan of £650,000 by their company O'Flynn Construction Company Ltd, was a misuse of the relevant reliefs.

He disagreed with a decision of the Appeals Commissioners of the Revenue Commissioners that the transaction in question was not a tax-avoidance transaction.

The judge was delivering his reserved decision on a challenge by the Revenue Commissioners to that Appeals Commissioners decision of April 2000.

The court was considering whether the Appeals Commissioners were correct in holding that the transaction was not a tax-avoidance transaction under Section 86.3 of the Finance Act 1989 on the grounds that it did not result in a misuse of the ESR provisions.

The judge said his answer to that question was "No", meaning the Appeals Commissioners were incorrect. This transaction, the judge said, involved export sales relief reserves in a company in the Dairygold group being transferred to a construction company not engaged in an export business in order to allow tax relief dividends to be paid to shareholders of that second company.

This scheme was "completely at odds" with the purpose for which the export sales relief was provided and the Revenue was required to have regard to the substance of the transaction, the judge found.

The case arose after O'Flynn Construction and Michael and John O'Flynn, with addresses at Kilcrea, Ovens, Co Cork, appealed to the Revenue Appeals Commissioners against an opinion of a Revenue officer in relation to the scheme.

The Revenue claimed that the company and the O'Flynns had entered into a scheme or arrangement for the purpose of extracting funds from the company in a manner which avoided a liability to advance corporation tax by the company. The Revenue also claimed the purpose of the scheme was to avoid payment of income tax by the O'Flynns on the receipt of dividends funded by their company.

On January 27th, 1992, it was claimed the O'Flynns each received income of £298,000 in the form of tax-free ESR dividends funded by the write-off at the same time of a loan from their company, resulting in a depletion of the assets of the company.

It was claimed the dividends were received by the brothers as a result of an arrangement not undertaken to legitimately avail of tax reliefs, but involving an abuse and misuse of law.

The Revenue had claimed the scheme involved three distinct phases. The first related to the isolation within the Dairygold group of ESR reserves of some £1.2 million. The second phase related to the utilisation of £600,000 of the reserves by unconnected persons and the third phase related to the utilisaiton of the balance of the reserves - £600,000 - by Michael and John O'Flynn.

The Revenue argued the substance of that transaction was that the profits of O'Flynn Construction Ltd were used to fund an ESR dividend payment to its shareholders. It was claimed the transaction, in the form of a complicated and unusual series of steps, was undertaken primarily to give rise to a tax advantage.

The Irish Examiner reports that despite a buoyant construction industry, builders' providers firms claim to be facing commercial and financial challenges.

Among these are the control of overheads and employee costs, maintaining gross margins, customer retention, finding suitably experienced employees and the potential saturation of the market.

The findings form part of a new survey conducted by Deloitte.

More than 75% of builders providers said they expected to see sales growth over the next 12 months.

The survey also found that trade sales account for 74% of turnover in owner-managed builders' providers companies.

With regard to financial challenges, numerous firms are looking at moving to out-of-town sites, with succession planning also identified as a significant issue likely to affect their business in the next five years.  

David Carson, managing partner in the M&A Transaction Services division of Deloitte, said: "(Builders' providers) are being squeezed on their margins, while also struggling to hire and retain staff at sustainable pay levels.

"In order to remain competitive, they need to look at how best to manage business growth and whether there are opportunities for further consolidation in the sector."

The Financial Times reports that German industry has reclaimed the country’s position as continental Europe’s economic powerhouse, with business confidence surging to a fresh 15-year high.

The surprise rise in the Ifo confidence indicator on Tuesday for the fifth consecutive month defied expectations and took the index to the highest since March 1991, shortly after Germany’s reunification. Economists had expected a fall after last month’s jump.

The latest rise, from 105.4 in March to 105.9 in April, highlighted how German companies have shrugged off the impact of higher oil prices, restored international competitiveness and boosted exports amid robust global growth.

The country’s industrial renaissance further brightened the prospects for the 12-country eurozone. Axel Weber, president of the Bundesbank, predicted an upswing this year “that becomes broader and stronger”. French business confidence reached a five-year high earlier this week.

However, the Ifo survey results suggested German business confidence might have peaked. While companies were more upbeat in April than in March about their current situation, optimism about the next six months fell for the first time since last November.

Optimism in the retail industry also dropped significantly, setting back hopes that the export-led recovery was finally feeding through into a sustained pick-up in consumer spending.

The European Central Bank has also become increasingly worried about the eurozone inflation outlook, especially as oil prices continue to soar. German inflation jumped to a higher-than-expected 2.3 per cent in April from 1.9 per cent in March, according to estimates on Tuesday based on data from five of the country’s states.

Lucas Papademos, ECB vice-president, told the European parliament yesterday that “further increases in interest rates in the course of the year are warranted in order to ensure that price stability will be ensured”. His remarks were the first reference by an ECB official to a series of rate increases. The ECB is expected to lift borrowing costs by another quarter percentage point to 2.75 per cent in June.

The Ifo index’s trend rise since the middle of last year has been reflected in official industrial production figures, but economists were wary about over-interpreting the wider implications. German export success has boosted company profitability but there is little sign of high unemployment falling significantly. Falling real wages have also constrained consumer spending, al-though the powerful IG Metall trade union has in the past week secured a 3 per cent pay rise for 3.4m metal industry workers for the 10 months from June. Another risk is that a stronger euro will choke off the export-led recovery.

Meanwhile, Peer Steinbrück, finance minister, pledged to fight back against low taxes in competing European economies, promising a tax system that improved German companies’ global competitiveness. “An effective tax rate of 39 per cent is not internationally competitive,” he told a banking conference in Berlin.

He said a planned overhaul of corporate taxation should be ready by the end of May. Chancellor Angela Merkel told the same Berlin conference that Germany needed a level playing field in the way it taxes different types of companies, but warned that there was “little scope for major tax relief” from the planned corporate tax changes.

The reforms, a long-standing business demand, are a key part of the action programme agreed last year by the chancellor’s ‘grand coalition’ of Social and Christian Democrats.

Mr Steinbrück also urged Germany’s banks to engage in a partnership with the government to avoid a backlash from the German people over controversial economic reforms.

The FT also reports that Tony Blair has ruled out any possibility that UK ministers might actively seek to block a future bid by Russia’s Gazprom for Centrica, the gas supplier.

The prime minister believes that Britain must stick firmly by its commitment to liberalise European markets.

In recent months, Department of Trade and Industry officials have responded to Gazprom’s expression of interest in Centrica by examining whether ministers could legislate to block a bid in order to protect the security of UK energy supplies.

However, Mr Blair has told allies he does not wish to go down this route and that any Gazprom bid for Centrica can be dealt with satisfactorily by the UK’s independent competition authorities.

Mr Blair thinks Britain must face down the wave of “economic patriotism” shown by some EU states, such as France. He is also beginning to work with Angela Merkel, the German chancellor, to flesh out a new drive on European economic reform when Germany takes over the EU presidency next January.

Gazprom’s expression of interest in a possible takeover of Centrica was repeated yesterday on a visit to London by Alexander Medvedev, the Russian group’s deputy chief executive.

Mr Medvedev, who had talks with Alan Johnson, the trade and industry secretary, said Centrica was on a list of “potential acquisition targets” – but that the Russian group had not held any discussions with either Centrica managers or shareholders.

Speaking at the Russian Economic Forum in London, Mr Medvedev said Gazprom had more than 10 potential acquisition targets, but added: “With our current financial strength it’s hard to find a company which is not on our watch list.”

Mr Johnson underlined that the UK would not seek to oppose Gazprom’s entry into the British market. “Whatever the difficulties and challenges of globalisation, the answers will not be found in the stagnant waters of protectionism,” he said.

While in London, Mr Medvedev also raised the stakes in Gazprom’s increasingly bitter dispute with the European Union with a public attack on EU plans to liberalise the gas market.

He warned that EU proposals to deregulate the market and loosen long-term contracts between Gazprom and EU-based customers could “undermine the stability of the gas market”.

Mr Medvedev also rejected EU calls for Russia to ratify international agreements that would compel Gazprom to surrender its export pipeline monopoly.

He denounced the EU-backed Energy Charter Treaty, which would regulate the European energy trade, as a “still-born document”, saying it would require extensive revision before Moscow would agree to EU demands for ratification. Last week Alexei Miller, Gazprom’s chief executive, told EU ambassadors that the company might favour North America and China if European countries blocked its ambitions to expand downstream.

Mr Medvedev insisted this should not be “interpreted as a threat or blackmail”. He pledged Gazprom would continue to increase supplies to Europe, raising its market share from 26 per cent to 33 per cent by 2010.

But he said that when Gazprom made its investment decisions it would take EU attitudes to long-term contracts into account, saying long-term security of supply went together with “long-term security of demand”.

The New York Times reports that when GlaxoSmithKline began talking to Roche three years ago about commercializing the prescription diet drug Xenical, the timing could not have been better for Steven L. Burton.

An executive with Glaxo's consumer heath care division, Mr. Burton had been overweight for years, carrying 270 to 275 pounds on his 6-foot-1 frame. Those measurements put him well into the "obese" category, a condition shared by 30 percent of American adults. And his doctor had just issued a stern warning to Mr. Burton.

"I didn't think seriously about a serious weight-loss program until I had a couple of kids and I had a doctor who was telling me pretty bluntly that it was time to do something about my blood pressure and high cholesterol and weight for the sake of my kids," he said recently. "That's pretty motivating."

Now Mr. Burton, 47, has the job of motivator in chief as Glaxo prepares to market an over-the-counter version of Xenical. During the last three years, while ramping up the marketing plans, he has been using the drug himself. And while he does not envision himself posing for the before and after shots in a diet ad, he can offer personal testimony to the drug's potential benefits. In his three years on Xenical, Mr. Burton said he has dropped to 210 pounds from 270, and kept it off.

Those results, he warns, are better than the drug's typical user will achieve because he has been particularly faithful to his regimen of exercise and diet. But he can hope his dieting success and good luck carry over to the challenge of turning the drug into a successful over-the-counter weight-loss product.

Xenical, sold by Roche in the United States since 1999, has had only moderate success as a prescription drug in this country.

Part of the problem has been what Mr. Burton refers to as the "oops" factor — the drug's potentially embarrassing side effects. They can include diarrhea, flatulence and episodes of incontinence.

The drug's popularity has also been hampered by the only moderate and, sometimes, fleeting, weight loss it typically yields — and the fact that many insurance companies do not cover its use.

But Glaxo, which paid Roche $100 million and an undisclosed share of future revenue for over-the-counter rights to Xenical, is betting that Mr. Burton and his team can make a consumer version an attractive option for many of the two-thirds of Americans who are overweight. At stake is a piece of the estimated $15 billion annual market for weight-loss drugs and products.

"Even a small percentage of that market is going to be a significant commercial opportunity," said Mr. Burton, who is vice president for weight-control products in the consumer health care unit.

Mr. Burton already has a track record in such efforts. Although he was never a smoker, he led Glaxo's successful over-the-counter introduction of the smoking-cessation products NicoDerm patch and Nicorette gum, which were sold only by prescription until 1996.

For Xenical, the Food and Drug Administration recently issued what is known as an "approvable" letter for over-the-counter sale of the drug, which Glaxo plans to market under the trade name Alli (pronounced al-EYE.)

The F.D.A. letter means the agency wants more information before the product gets final clearance. It can sometimes take weeks, months or — in some cases — years to answer those F.D.A. questions. Still, Mr. Burton said he was optimistic that Alli would be on drugstore shelves this year and at a price affordable to most Americans: $2 to $3 a day.

Drug companies increasingly are turning to over-the-counter versions of their brands to extend the product life and generate steady cash flow. But for a prescription drug to be cleared for over-the-counter sales, it must be proved safe even when misused by careless consumers. It is not rare to sink millions into a switch only to be rejected by the F.D.A.

Merck and Johnson & Johnson experience that last year when an F.D.A. advisory panel voted against their plan for the over-the-counter sale of Mevacor, a cholesterol-lowering drug. Glaxo recently abandoned an idea to take the nasal spray Flonase over-the-counter, following speculation that the F.D.A. would be reluctant to approve the commercial sale of a synthetic steroid-based spray.

Even if it receives final F.D.A. clearance, the gamble for Glaxo will be particularly uncertain given Xenical's marketing history. Despite its reputation as generally safe, and evidence that it helps people lose at least some weight, the product never became the blockbuster once envisioned.

Steven Francesco, who operates Francesco International, a pharmaceutical consulting business based in South Orange, N.J., said, "It never went very far on the prescription side, partly because they couldn't get reimbursement." Diet drugs are generally not reimbursed by insurance companies.

And diet drugs carry heavy negative image connotations, as a category that has included some of the most colossal failures of the pharmaceutical industry.

Nearly 10 years after the drug Redux was withdrawn, for example, the maker, Wyeth, is only now drawing near the close of $21 billion in litigation over Redux — which was half of the diet combination known as fen-phen that was found to damage heart valves and cause pulmonary hypertension.

Xenical has a generally clean safety record. But the consumer watchdog group Public Citizen recently called for its withdrawal, citing research that some scientists say links the drug to colon changes that can be precursors to formation of polyps and colon cancer.

A Glaxo company spokeswoman, Malesia A. Dunn, said long-term testing in humans had demonstrated no increased risk of colon cancer in the drug's users.

Despite Xenical's moderate success as a prescription drug, Mr. Francesco said that some lackluster prescription products had better potential on the over-the-counter market, where they can be sold in attractive packaging from drugstore aisles rather than dispensed by a pharmacist in amber plastic bottles. Xenical might be one of those.

"There are a lot of marketing opportunities for this on the consumer side which aren't available on the prescription side," Mr. Francesco said. "Glaxo paid a fortune. They saw the potential because they saw the benefits to a complete program."

Another industry marketing consultant, Gaurav Kapoor of the New England Consultancy Group in Westport, Conn., said that Glaxo's understanding of the consumer market should not be underestimated. "Obviously, Steve's no dummy," Mr. Kapoor said. "He's got a whole group who's doing a lot of research on this."

At Glaxo, Mr. Burton envisions Alli being sold at free-standing drugstore kiosks along with a colorful kit containing 250-page booklets with diet advice and meal plans, calorie counters and dining-out guides. Consumers would also be able to sign up for a free online behavioral support program, along with e-mail newsletters and chat rooms where people can trade stories of their diet successes and lapses.

Already, the company has started a Web site, QuestionEverything.com, where dieters can post comments and take part in surveys — an advance look at what the Web-based marketing might look like.

Full details of the Alli marketing plans have not been released. But if past is prologue, here is a clue: Shortly after the introduction of Nicorette and NicoDerm, Glaxo's NicoVan traveled the country advising patients on how to quit smoking. The products quickly grabbed 90 percent of the $575 million smoking-cessation market.

Emphasizing that the drug is not a magic pill, Mr. Burton said the company would look for committed consumers — those who are ready to make long term changes in the way they eat and exercise.

Mr. Burton also said the campaign would very clearly warn consumers about the drug's side effects, like flatulence and diarrhea, that become worse when the drug is taken along with a high-fat meal.

"I'll never forget having a fish sandwich and loading it up with tartar sauce and having French fries," Mr. Burton recalled. Luckily for Mr. Burton, what he refers to as his "classic oops" episode happened on a Saturday when he was running errands, not during an important meeting. So he simply ran home to change clothes.

The drug works by blocking the absorption of fat in the intestine, meaning that about one-third of the fat a user eats is never absorbed — the reason a high-fat diet can cause problems. Restricting the amount of fat eaten helps control the problems to some degree.

A diet devoid of fat, though, would make the pill largely superfluous.

So Glaxo's approach will emphasize discipline, rather than deprivation. For example, consumers taking Alli would be instructed that when eating at an Italian restaurant, chicken Marsala is a better choice than stuffed manicotti. "Fettuccine Alfredo probably is a poor choice," Mr. Burton said.

The big questions are whether, with all the competing diet potions, foods and programs, Glaxo can generate enough interest in Alli and, even if so, whether the product will have staying power.

"You can guarantee it will be a full army of effort," said Mr. Francesco, who predicts a major advertising campaign. "Weight reducers tend to be passionate and then burn out, then they go to the latest and greatest. This could hit a potential $500 million a year, then sink like a stone. Or maybe it is something that can be sustained."

One reason for doubt is that in a Glaxo study of patients taking Xenical at over-the-counter dosage, about 3 percent of the users quit because of the side effects.

That is why, Mr. Burton said, "we have to go out of our way to make sure people understand how the product works."

"That's part of the honesty, the bluntness, the candor that we're going to put into our communications," he said. "If you don't stay with this program, you're at risk for things like having to go to the restroom more frequently," he added. "We don't want people to be surprised."

The NYT says that Just a couple of years ago, Russia's big energy companies hardly ventured outside the former Soviet Union. These days, they are trying to horse-trade on a global scale, swapping stakes in their giant oil and gas fields for ports, pipelines and networks of gas stations around the world.

Executives streaming in from China, Israel and India are lining up outside Gazprom's headquarters, hoping for a piece of Russia's natural gas reserves.

But the company's accounts — and indeed those of the government, too — are already flooded with petrodollars. So, the Russian government and its oil and natural gas operators want to swap for something else: they want to build large retail networks to reach consumers in the United States, Europe and China.

Already, a blueprint is emerging under which state and private companies trade a stake in Russian oil and natural gas projects for a role in overseas expansion.

Two major energy deals are under negotiation in Moscow. Gazprom is seeking to trade access to its Russian reserves for a chance to help build or gain a stake in terminals for liquefied natural gas, or L.N.G., in the United States. And Rosneft, the state oil company, wants to build a network of gas stations in China.

In the deals, analysts see the larger ambitions of Russia as a power broker in the worldwide energy markets, with the power to dictate terms to companies like Chevron or BP, and the range to sell energy products directly to consumers in the United States. Russia's crude oil reserves are the largest outside OPEC, if Canadian tar sands are not counted as oil reserves, and Russia's natural gas reserves are the largest in the world.

"There's the spirit that it is morning again in Russia," Thane Gustafson, a senior analyst at Cambridge Energy Research Associates, said of Russia's oil and gas companies in a telephone interview. "Stand tall in the saddle. And what is the one thing the Russians have in hand as a trump card? They have energy resources and location."

Situated 550 kilometers, or 330 miles, north of Murmansk in the Barents Sea, the Shtokman gas field is well positioned for exports to the Eastern Seaboard of the United States and is expected to be the object of the largest energy deal to close in Russia this year. Gazprom is in the final stages of choosing partners; it had said it would disclose them this week but has delayed the announcement. In any case, entry will not be cheap: the initial investment is likely to exceed $10 billion.

The prize is a minority stake in a reserve of 3.6 trillion cubic meters, or about 127 trillion cubic feet, of natural gas, equivalent to seven times the annual consumption of European Union member states.

In September, Gazprom announced a short list of possible partners, including Chevron and ConocoPhillips of the United States, Norsk Hydro and Statoil of Norway, and Total of France. But the negotiations are not all about money, say bankers and energy executives involved. A chief aim for Gazprom is to use domestic reserves to build its international profile.

For example, Total, a long-shot contender according to analysts, offered to trade Gazprom its stakes in a Norwegian offshore field and prepaid rights to capacity at the Sabine Pass L.N.G. terminal in Cameron Parish, La., for a role in Shtokman, Reuters reported.

Gazprom's ambitions to expand overseas have a political as well as commercial dimension, so it is not surprising that Russian officials endorse Gazprom's strategy of reciprocity as it expands into Europe and even the United States and Asia. After all, Western companies have tried to enter the Russian market for a decade.

Commercially, Gazprom could increase its margins by selling at retail rather than wholesale. In Europe, retail prices range from 1.9 times wholesale prices in France to 6.7 times in Denmark, according to a study by Goldman Sachs. Retail sales prices are higher, of course, to cover the additional costs of building and maintaining distribution networks. Gazprom's wholesale revenues in Europe last year were more than $25 billion.

Similarly, Gazprom is pushing American companies to help Russia ensure access to American pipelines for the eventual exports from Shtokman, according to an American banker who has sat in on talks between the Russian company and Chevron.

That could be a delicate task after Congress gave a chilly reception to Middle Eastern and Chinese foreign investors recently. Two high-profile bids by foreign companies to buy United States assets failed. The China National Offshore Oil Corporation withdrew its bid for Unocal, the oil company based in California, and DP World of Dubai aborted efforts to own port terminals. Gazprom could be hoping an American partner could ease its entry into the United States.

Indeed, analysts say the reluctance — or inability — of the American partners to help Gazprom enter the American market may be holding up the talks. Chevron, ConocoPhillips and Gazprom have declined to comment.

In a sign of high-level government interest in the big energy deal, William J. Burns, the American ambassador to Russia, met last week with Gazprom's chief executive, Aleksei B. Miller.

In a related dispute, Mr. Miller met with European Union ambassadors in Moscow the same week and warned that attempts to thwart Gazprom's expansion into Europe would only impel the company to turn to eager buyers in Asia instead.

"Attempts to limit Gazprom's activities in the European market and politicize questions of gas supply, which are in fact entirely economic, will not lead to good results," Gazprom said in a statement issued after the meeting.

"This may be controversial, but recent examples in the United States make Russia look not all bad" in terms of economic protectionism, said Peter Westin, chief economist at MDM Bank in Moscow.

Another keenly awaited energy deal this year is the expected initial public offering of stock in Rosneft. Rosneft is also in talks with Chinese companies over opening a network of filling stations in China in exchange for a 5 to 10 percent stake in Rosneft, according to Aleksei N. Kormschikov, an oil and gas analyst at the UralSib brokerage firm in Moscow.

This move would smooth Rosneft's entry into China, ensuring a customer for Russian energy outside Europe and the United States. Rosneft's capitalization is estimated at about $60 billion, making the expected Chinese share worth about $3 billion to $6 billion.

The big globe-spanning swaps have a precedent in recent deals. The Russian company Lukoil's strategic partnership in 2004 with ConocoPhillips, the third-largest United States oil operator after Exxon Mobil and Chevron, allowed Conoco access to reserves in the far north and access to a private terminal on the Arctic Ocean at Varandey Bay.

In turn, Conoco agreed to help Lukoil retain its production-sharing agreement in the huge West Qurna-2 field in Iraq. Lukoil said this week that it was pleased with the partnership and believed that a final agreement with Iraqi authorities guaranteeing Lukoil control over the field near Basra was near.