UPDATE 1-Russia Gazprom Neft to pay 5.4 rbls/share for 2007

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MOSCOW, May 13 (Reuters) - Russia's Gazprom Neft (SIBN.MM: Quote, Profile, Research), the oil arm of gas export monopoly Gazprom (GAZP.MM: Quote, Profile, Research), has recommended a dividend payment of 5.4 roubles per share for 2007, a company official told Reuters on Tuesday.

The figure implies a total dividend payout of 25.6 billion roubles ($1.1 billion). But it will mark a 33 percent decline from 2006 dividends, which stood at 8.1 roubles per share.

"We have paid very large dividends. Now we want to channel them toward investments. We have big expansion plans," a source close to the board of directors told Reuters after the company official, Natalia Vyalkina, confirmed the size of the dividends.

Despite having an 11.5 percent share of Russia's profitable refining market, Gazprom Neft, previously called Sibneft, has been fighting declining production since it was bought by Gazprom from billionaire Roman Abramovich in 2005.

The company plans to raise up to $2 billion via syndicated loans before the end of this year to fund acquisitions and boost production.

Last month the chairman of Gazprom Neft, Alexander Dyukov, said the company would pay 20 to 25 percent of 2007 net profits as dividends, compared with 40 percent of net profit in 2006.