Tyumen Seeking Sale Early 2003

Shareholders in the Tyumen Oil Company may offer a stake in Russia's third largest oil producer in the first half of 2003, said Mikhail Fridman, the Chairman of Alfa Group which controls half of Tyumen.

Tyumen, which pumps enough oil to fuel France for half a year, this month chose a financial adviser to sell a stake in an initial public offering or direct to a strategic partner, he said. Fridman would not say however what proportion of the group would be sold and did not disclose a price for such a sale. He declined to name the adviser.

BP, Royal Dutch/Shell Group and Total Fina Elf are all among the international oil companies that are boosting their exposure to the Russian oil sector. They see the world's second largest exporter of oil after Saudi Arabia as a way to reduce their dependence on the Middle East, where energy projects are facing long delays. BP in April paid $375 million to raise its stake in Tyumen's subsidiary Sidanco to a quarter.

“The oil business is much hotter than any other industry in Russia - especially now, with problems in the Middle East,” Fridman said in an interview. “Having begun the process now, we'll be ready to make moves (on the sale) between the end of this year and the middle of 2003."

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