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. Last Updated: 07/27/2016

LUKoil, Conoco Eye Venezuelan Reserves

VedomostiLUKoil deputy chief executive Leonid Fedun
LONDON -- LUKoil, the country's biggest oil company, said ConocoPhillips will boost its stake to 20 percent within a year as the partners try to secure a project in Venezuela that will supply crude to the United States.

ConocoPhillips owns more than 10 percent of LUKoil and is buying shares in the market, LUKoil deputy chief executive Leonid Fedun said Friday. The stake is worth more than $2.8 billion. Houston-based ConocoPhillips, the biggest U.S. refiner, has a market value of almost $72 billion.

"We are interested in Venezuela's unique reserves," Fedun told reporters in London. Venezuela was the fourth-biggest supplier of crude oil to the United States in December, according to the International Energy Agency.

LUKoil, which owns more than 2,000 U.S. gasoline stations, and ConocoPhillips already plan to tap Arctic fields and ship oil to the United States. A proposal to build a plant to liquefy natural gas on the Yamal peninsula in northwestern Siberia, where fields will start producing gas in April, is not ready, Fedun said. "There is problem with ice-class LNG tankers," he said.

ConocoPhillips is also in talks with Gazprom on a possible investment in a $10 billion project to develop the Shtokman gas condensate field in the Arctic Ocean and sell LNG to the United States. The project will not compete with Yamal, Fedun said.

LUKoil plans to sell $500 million in eurobonds this year to finance purchases of oil and gas fields in the northern Timan-Pechora province, where a joint venture with ConocoPhillips will develop oil reserves, Fedun said. LUKoil also plans to drill its first well in Columbia this year.

LUKoil is interested in refineries in Lithuania and Southern Europe, and in Ruhr Oel, which operates four German refineries, Fedun said.

Petroleos de Venezuela, Venezuela's state oil company, in October was in talks to sell its 50 percent stake in Ruhr Oel to Russia's Alfa Group, which holds an interest in TNK-BP. London-based BP, the world's second-largest publicly traded oil company, owns the other half of Ruhr Oel.

Fedun declined to say whether LUKoil plans to compete with Alfa Group for the German refineries.