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West Siberian Resources Joins Alliance
Inking the memorandum on consolidating two oil companies is slated for today, January 15, 2008. Another vertically-integrated giant will emerge after the merger of Alliance Oil Co., which is controlled by the Bazhaevs family and has Khabarovsk refinery as the biggest asset, and West Siberian Resources (WSR) that produces crude oil in Russia and trades on Stockholm stock exchange. The analysts estimate the worth of the new company at $2.3 billion to $2.5 billion.
The memorandum on consolidating assets of WSR and Alliance Oil Co. is to be sealed in Stockholm today, January 15, 2008, one of the market players said. Another source, the one close to the Bazhaevs, specified that Alliance Group that controls Alliance Oil Co. would probably get the majority stake in WSR. The plans are to enter into a final consolidation agreement in two weeks.
WSR will release new stocks in favor of Alliance, which assets are estimated at $1.5 billion. Alliance will get 60 percent in the consolidated company; Troika Dialog and Morgan Stanley are the deal’s consultants. Alliance and WSR has declined to comment on the undertaking.
A new vertically integrated oil company will emerge in Russia after consolidation. WSR currently produces roughly 1.5 million tons of crude a year but has no refining assets of its own but for a small Alexandrov refinery in the Tomsk region. Registered in the Bermudas, WSR’s stocks are traded on the Stockholm exchange, while its production assets are located in Russia’s Tomsk region, Timano-Pechora and Volga-Urals provinces.
Alliance owns Khabarovsk refinery that processes 3.2 million tons of crude a year but its production arm Tatneftedobycha that operates in Tatarstan could hardly be called a big producer, as its annual output doesn't exceed 430,000 tons. Alliance is rebuilding the refinery to reach processing of 4.5 million tons by 2011, widening its depth from 61 percent to 91.5 percent.
www.kommersant.com
All the Article in Russian as of Jan. 15, 2008
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