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. Last Updated: 07/27/2016

LUKoil, Chevron in Talks

CHISINAU, Moldova -- Russia's largest oil company LUKoil is near a final agreement with Chevron Corp. to buy a 5 percent stake from the U.S. oil major in its Tengiz oil project in Kazakhstan, LUKoil president Vagit Alekperov said Tuesday.


"Today we came close to reaching a final agreement with Chevron and we hope within a week to sign a contract to buy 5 percent of their [total] stake in Tengiz," Alekperov told reporters in the Moldovan capital.


Chevron owns a 50 percent stake in the $20 billion joint TengizChevroil venture to develop Tengiz. Mobil Corp. and the Kazakh government owns the rest.


LUKoil hopes to sign an agreement, possibly in February, with Baghdad, to revive a stalled billion-dollar project to develop oil reserves in Iraq's Western Kurna oil field.


Alekperov, talking to businessmen at the opening of two filling stations in Moldova, also said the company's net profits in 1996 fell to 1.3 trillion rubles from 2.4 trillion rubles in 1995, while sales rose from 29.57 trillion rubles to 35 trillion rubles.


He said later the fall in net profit was due to heavy expenditures on investments.


LUKoil on Monday released preliminary unaudited figures showing pretax profits of 3.7 trillion rubles in 1996 and a rise in output.


Investment bank Renaissance Capital said the financial figures were disappointing, but maintained its buy recommendation on the company's ordinary and preferred shares.


It said profitability appeared to have declined despite an improvement in operational performance.


?A pipeline Georgia is readying to carry Azerbaijan's oil from the Caspian Sea "cannot compete" with a pipeline to the Black Sea port of Novorossiisk, as it is more expensive, Russian Deputy Prime Minister Valery Serov said, according to an Interfax report Tuesday.