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ConocoPhilipps Buys Russian Government’s Share in LUKOIL
September 29, US ConocoPhilipps has bought the Russian government's 7.6 percent stake in LUKOIL - the world’s No.2 oil company by reserves. The deal is considered Russia's biggest privatization.
ConocoPhilipps bought the stake for $1.988 billion, only a fraction above $1.928 billion starting price. John Lowe and John Carig, ConocoPhilipps' vice presidents, acted as bidders in the auction.
Other applicants at LUKOIL auction included Russia's Promsvyazbank and Promregionholding, who represented unidentified clients.
ConocoPhilipps' victory appeared predetermined since July, when Russian President Vladimir Putin gave his tacit approval to its bid at a meeting with the heads of both companies.
The price tag made the sale the single biggest cash-earner in the history of Russian privatization, beating the $1.88 billion sale of a 25 percent stake in the Svyazinvest telecom group in 1997.
LUKOIL management is satisfied with the results of the auction, the company’s Vice-President Leonid Fedun told journalists Wednesday. “It’s the biggest privatization deal in the history of privatization in Russia,” he stated. According to Fedun, the auction confirmed the company’s capitalization and enlarged LUKOIL capital by $2 billion. He noted also that the price of LUKOUL state package has exceeded the company’s quotations in terms of its shares. “If one looks at the share’s quotations this year, this is an essential overpricing,” Fedun told RIA Novosti.
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