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. Last Updated: 07/27/2016

Conoco to Sell 10% of LUKoil?

U.S.-based UBS analysts say ConocoPhilips could sell half of its 20 percent stake in LUKoil to pay off debt in a deal that has the potential to discourage other investors in Russia.

The third-largest U.S. oil company said Wednesday that it planned to sell $10 billion of assets over the next two years to reduce debt. These assets would affect the company’s exploration and production portfolio, it said without giving further details.

UBS said the sale of the LUKoil stake was likely. “We suspect the following options are on the table: 50 percent of its LUKoil stake,” analysts said in a research note.

LUKoil spokesman Dmitry Dolgov declined comment as did LUKoil’s deputy chief for investor relations Gennady Krasovsky. Calls to ConocoPhillips’ press office went unanswered Thursday. Weatherston didn’t respond to a request for comment sent by e-mail.

UBS analysts in Moscow suggested that 10 percent of LUKoil could go for $4.8 billion. Buyers could include institutional investors and LUKoil’s executives and co-owners, CEO Vagit Alekperov and his deputy Leonid Fedun.

VTB Capital analyst Svetlana Grizan viewed the deal as unlikely. For one thing, she said the LUKoil stake accounted for 34 percent of ConocoPhillips’ profits in the first half of 2009.

“There’s no sense in selling such a good asset,” she said.