According to its Department of Information, Russia's government will sell 74.95% of the Slavneft oil and gas company before the end of the year 2002. Mikhail Kasyanov, the Prime Minister of Russia, has signed a directive to this effect. The directive orders the Ministry of Properties of Russia to work out the conditions of the sale. Slavneft's stock will be sold through open bidding. The results of the auction will become known in December 2002. The proceeds must be entered in the state budget before February 15, 2003.
Slavneft was founded in 1994 by the joint decision of the governments of Russia and Belarus. Russia's State Properties Committee owns 55.27% and State Federal Properties Fund 19.68% of the company. In 2001, the company produced 13.5 million tonnes of oil, which was a 10% increase on the previous year. The company owns oil and gas-producing entities in various parts of Russia and three oil refineries. These are Slavneft-Yaroslavnefteorgsintez, Mozyr Refinery and D. I. Mendeleyev Slavneft-Yaroslavl Refinery. In 2001, the three combined processed 17.5 million tonnes of crude, which was a 2% increase year-on-year.
Initial plans included selling, in 2003, 19.8% of the company, that is, the stock owned by the Federal Properties Fund. In spring this year YUKOS and LUKoil expressed their interest for acquiring the stock. After Mikhail Gutseriyev, Slavneft's President, scandalously lost his post in May 2002, analysts discussed the company's gravitation toward selling its shares. According to expert estimates, the portion of Slavneft to be sold may be acquired for between USD 1.5 and 2 billion.