ConocoPhillips expects to raise Lukoil stake to 20% in 2006: CEO

ConocoPhillips expects to raise Lukoil stake to 20% in 2006: CEO

Moscow (Platts)--21Mar2006

ConocoPhillips plans to spend $2.5-$3 billion till end 2006 to increase
its ownership stake in Russian oil major Lukoil to 20% from around 17%
currently, ConocoPhillips chairman and CEO James Mulva told Russian daily
Vedomosti in an interview published Tuesday.
"I can say that currently we are going close to a 17% [stake in
Lukoil]", Mulva said, confirming the company's plans to increase the
stake in Lukoil by the end of the year.
ConocoPhillips and Lukoil signed a deal giving the US major a stake in
the Russian company in September 2004. The US company initially acquired a
7.59% stake in Lukoil from the Russian government, and has increased its
ownership since. The agreement allows ConocoPhillips to raise its ownership in
the Russian oil producer to no more than 20%.
Mulva said that ConocoPhillips had invested a total of $6 billion in
Russia's projects so far. Apart from Lukoil, it also holds a 50% stake in
the 20,000 b/d Polar Lights project, a joint venture with state-controlled
Rosneft, which involves development of four oil fields in the Nenets
autonomous region in northwestern Russia.
ConocoPhillips is also seeking a stake in the huge Shtokman project in
the Barents Sea. Project operator Gazprom is expected to name partners for
the consortium to develop the field by April 15, choosing from five
shortlisted companies. The US' Chevron, Norway's Norsk Hydro and Statoil, and
France's Total are also on the list.
"We expect a significant share in the project," Mulva said, adding that
he could not give an actual figure. It is up to Gazprom to choose the ones who
deserve to participate, he added.
Mulva also said that his company was negotiating other possible projects
with Gazprom and Rosneft but declined to elaborate because of "confidentiality
and competitiveness".
But he said in response to a question that ConocoPhillips did not plan to
purchase a strategic stake in any other Russian companies.
The Russian government is considering selling a stake in the company to a
foreign strategic investor alongside an initial public offering scheduled for
the second half of 2006. "It is hard to say now what exactly will be offered
but I don't think that we would buy a strategic share in one more Russian
company," Mulva said.
--Nadia Rodova, nadia_rodova@platts.com

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