Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Cyprus-Based 'Strangers' Purchase 9% of LUKoil

The Federal Property Fund on Monday approved the sale of a 9 percent stake in LUKoil, Russia's largest oil firm, to three "strangers," government officials said.

A company run by Cyprus-registered Reforma Investment Ltd. paid just $5,000 above the $200 million minimum bid for the stake at an investment tender held in October.

Confirming that the sale has now been registered, Property Fund officials gave very little else in the way of details.

"The offshore firm has been registered by three individuals with strange names," a Property Fund spokeswoman said Monday in a telephone interview. She declined to give further details.

Reforma fought off another obscure Cyprus competitor, Cortinway Trading Ltd., whose bid came in at a mere $1,000 above the minimum price.

The winning bidder must still spend a further $240.42 million to fulfill a LUKoil investment program and become the full owner of the stake.

The Property Fund was also unable Monday to release full details of an auction for a 1 percent stake in LUKoil that was due to take place.

"The stake has been sold and the [Property Fund] commission has approved the auction results," said the spokeswoman, who declined to be named.

The government had been offering 7.466 million shares for 170 rubles ($6.43) each. Full results will be announced Tuesday, the spokeswoman said.

LUKoil shares closed at $8.92 per share on the Russian Trading System on Monday.

Meanwhile, LUKoil announced Monday it plans to increase production 10 percent and almost triple reinvestment.

The oil holding expects to produce about 67 million metric tons of crude oil in 1999 and plans for that figure to reach about 74 million tons in 2000, said a company statement issued Monday after the board of directors completed drafting of next year's business plan.

The company also expects to process about 20.4 million tons of oil at its Russian refineries this year. That figure is drafted to rise 13 percent to 23 million tons next year.

The company estimates include crude output and processing by the recently acquired Komitek oil holding and its affiliated Ukhta refinery starting from the fourth quarter of 1999.

In 1998, LUKoil's producers extracted 62 million metric tons, while the holding's two Volgograd and Perm refineries refined 16.5 million tons of oil.

The company has penciled in total expenditures of 196.1 billion rubles ($7.4 billion) for 2000.

Of that amount, some 36.6 billion rubles ($1.4 billion) is slated for capital expenditures, up from this year's 12.4 billion rubles. LUKoil plans to invest about 70 percent of the 2000 capital expenditures budget on oil production, of which roughly 9 billion rubles will be forwarded to offshore projects, the company said.