RusEnergy

04.14.2005 rzd-partner news - LUKoil and ConocoPhillips are sure they will get through all legal procedures within the month to establish a joint venture, which will work fabulously rich LUKoil-held deposits in the northern part of the Timan-Pechora oil-and-gas bearing province in European Russia's extreme continental north. Vaghit Alekperov, LUKoil President, and Jim Mulva, ConocoPhillips President and Director General, met in conference today to discuss their companies' strategic alliance, LUKoil PR say in a press release. The conferees also took stock of partnership prospects in third countries, where they also have a chance to join hands. Corporate partnership closely complies with previously made understandings, the bosses pointed out. German Gref, Russia's Minister of Economic Development and Trade, and Yuri Trutnev, Minister of Natural Resources, received Messrs. Alekperov and Mulva together to evaluate prospects of LUKoil/ConocoPhillips partnership in and outside Russia, says the release. ConocoPhillips won an auction of September 29, 2004, to acquire a 7.59% block of federally held announced and issued LUKoil ordinary shares at $1.988 billion. According to information circulated at that time, LUKoil and ConocoPhillips intended to establish a joint venture to prospect and extract petroleum and natural gas in Russia, with LUKoil to hold a 70% block, and ConocoPhillips the other 30%. As the joint venture contract has it, ConocoPhillips will pay LUKoil more than $370 million for a 30% share of LUKoil petroleum and gas resource rights, and additional sums for 30% of joint venture-related companies' circulating capital and for a similar share of capital investments LUKoil has made in the prospective joint venture's oil- and gasfields since January 1, 2004. Joint venture management will be up to LUKoil and ConocoPhillips on parity arrangements. The venture is expected to produce and sell an approximate daily 200,000 barrels of petroleum by 2008. All extracted petroleum will be piped to a LUKoil terminal in Varandei, a township on the Barents Sea coast in the Nentsi autonomous area, northernmost continental part of European Russia. From Varandei, the oil will go on by tankers to transnational markets. LUKoil intends to build up the terminal throughput to a daily 240,000 barrels by 2007. ConocoPhillips will take part in designing and funding the seaport enlargement project, reports RIA-Novosti.