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. Last Updated: 07/27/2016

TNK Close to Takeover of Sidanko After Cyprus Buy

Tyumen Oil Co., or TNK, could be positioned to take over rival oil firm Sidanko after a TNK-linked firm purchased a company that owns a stake in Sidanko, analysts said Wednesday.

A source close to TNK said a firm linked to TNK had purchased Cyprus-based Kantupan Holdings, which owns 40.3 percent of Sidanko. The price was not disclosed and a Sidanko spokesman declined to comment.

"If TNK manages to acquire Sidanko, it will become Russia's third-largest producer, overtaking Surgutneftegaz, a bit of news which seems to me very important," Aton oil analyst Steven Dashevsky said.

The TNK-linked firm bought Kantupan a few days before an asset exchange prescribed in an agreement between Sidanko and TNK, which ended a battle to control Sidanko's bankrupt production unit Chernogorneft.

Chernogorneft was sold to TNK affiliates in a 1999 bankruptcy auction against the wishes of Sidanko's shareholders, which also include Russian financial industrial holding firm Interros and BP Amoco.

Later in 1999, TNK agreed to return Chernogorneft to Sidanko in exchange for a blocking stake of 25 percent plus one share in Sidanko. TNK has said it hopes to finalize the asset exchange by the end of June this year.

However, analysts said the TNK-linked company's purchase of Kantupan could stymie final talks and delay the final agreement.

Interros and BP Amoco spokesmen told Vedomosti that they would keep to their obligations under the asset exchange agreement, but declined to say what stake TNK would eventually hold in Sidanko.