Russia’s Lukoil buys back stake from ConocoPhillips for $2.4 billion
28 Sep 2010
Russia's second-largest oil producer Lukoil yesterday announced that the company, along with a group of investors, has bought back 42.5 million Lukoil shares held by the US oil giant ConocoPhillips, for around $2.38 billion.
Lukoil, assisted by UniCredit Bank AG bought 5-per cent of the stake by exercising the purchase option, which is less than half of the total 11.6 per cent holding available from ConocoPhillips.
''This transaction helps us to steadily implement the program to enhance the company's investment attractiveness. It also allows us to support our share prices, since the transaction is funded by the Group's internal resources, without increasing the company's total debt'', Leonid Fedun, Lukoil vice president said.
Analysts say that Lukoil bought just enough shares to avoid potential third-party investors joining the company's board by accumulating the shares.
Moscow-based Lukoil is the world's second-largest privately held oil company by proven hydrocarbon reserves accounting for 1.1 per cent of global oil reserves and 2.3 per cent of oil production. The company is a dominant player in Russia with 19-per cent of country's oil production as well as refining.
The company owns oil exploration and production facilities, refineries and petrochemical plants in Russia, Europe, Asia, Africa and South America. The group's annual revenue is over $80 billion with a net profit of $7 billion.
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