LUKoil to Sell Stake in Caspian Oil Field to Japanese Company

LUKoil has today announced that it has signed an agreement to sell its stake in the Azeri-Chirag-Gyuneshli project to the Japanese Inpex Corporation. The deal is worth USD 1.375 billion. According to the conditions of LUKoil's existing agreements regarding the Azeri-Chirag-Gyuneshli project, the deal must first be approved by the Azerbaijani State Oil Company and the other participants in the consortium. In order to complete the deal all usual preliminary condition and must be fulfilled and certain permissions and agreements must be received. LUKoil's press service suggested that the deal should be completed in the first half of 2003.

According to LUKoil president Vagit Alekperov, the deal is part of the company's restructuring programme and 'represents an excellent opportunity to receive a fair price when disposing of fairly valued assets.' Nevertheless, Alekperov noted, LUKoil remains interested in developing oil and gas fields in the Caspian Sea.

The production sharing agreement signed by LUKoil and other oil companies in September 1994 envisaged developing the Azeri, Chirag, and deep water Gyuneshli fields in the Azerbaijani sector of the Caspian Sea. LUKoil's stake in the project is about 10%, including a 10% share of profits, an 11% share of joint work, and also a certain share in other assets.

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