12 November 2003
ConocoPhillips talks joint venture with Russia's LUKOIL
ConocoPhillips, the U.S.'s third largest oil company, is negotiating a joint venture with LUKOIL, Russia's second largest oil company, LUKOIL officials said.
ConocoPhillips is not the only company talking to LUKOIL, as ExxonMobil and ChevronTexaco are also in the running, but to date ConocoPhillips appears to be the front runner.
Executives on both sides said Vagit Alekperov, LUKOIL's chief executive, and James Mulva, chief executive of ConocoPhillips, had also discussed a broader deal that could lead to ConocoPhillips taking a 10% to 15% minority stake in LUKOIL worth $1.7 billion to $2.5 billion.
The groups have a history of cooperation, having signed a memorandum of understanding in 1999 for joint exploration of Russian oilfields.
Leonid Fedun, LUKOIL's vice president, said the ConocoPhillips venture proposal, discussed by the heads of the two companies in September, was for fields in the northern territories, said to hold 1 billion barrels of oil and 63 billion cubic meters of natural gas.
"Alekperov and Mulva met in New York where they discussed the potential creation of a JV. This process is under way," Fedun said. "It will be a Russian company, where Conoco will hold a stake."
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