HOUSTON, Sept. 29 (UPI) -- ConocoPhillips has bought a major stake in Russia's second largest oil producer OAO Lukoil Holdings.
The Houston company, formed by a merger of Conoco and Phillips Petroleum, won an auction to buy the Russian government's 7.59 percent stake in Lukoil for $1.99 billion. ConocoPhillips also plans to launch a tender offer for an additional 2.4 percent of Lukoil shares, the Wall Street Journal reported..
Additionally, ConocoPhillips said it could raise its stake in Lukoil to as much as 20 percent but did not specify from where the additional shares would be bought.
Buying the Kremlin's Lukoil stake represents the largest privatization in monetary terms in post-Soviet history, exceeding the $1.875 billion received for a 25 percent stake in telecom holding OAO Svyazinvest.
Under a proposed shareholder agreement, ConocoPhillips will be able to veto certain strategic decisions, despite not having the 25 percent normally required for such power. The agreement will also lock up ConocoPhillips' stake for four years.
Besides the Lukoil stake purchase, ConocoPhillips also will pay $374 million for 30 percent of a joint venture to develop energy assets in the Timan-Pechora region. In addition, the Houston-based company will purchase 17.5 percent of Lukoil's oil interests in Iraq.
