Russia: LUKoil Lines Up for Conoco Assets

 LUKoil Chief Executive Vagit Alekperov said "We are strategic partners with Conoco and they are restructuring their assets and I hope that we would be among the first to know about any sales to study the need to take part in projects that Conoco will offer to the market," Conoco, which has 20 percent in LUKoil, has said it will keep the strategic stake but could sell pipelines, terminals and natural gas assets in North America as part of a $10 billion asset sale plan.

Alekperov, 59, a Soviet oil industry veteran, withstood many political storms and industry reshuffles since turning from Russian deputy energy minister into LUKOIL's head in 1993 after masterminding its privatisation. He owns over 20 percent of LUKOIL, Russia's No.2 oil producer, and is ranked as Russia's third-richest man, with personal wealth of $8 billion. He said he would keep raising his stake in the firm and had set no limits.

Alekperov called on the Kremlin and government to ease access to reserves if Russia wants to maintain the growth rate of output, which has this year surpassed a landmark 10 million barrels per day level.  The state should also cap tariffs of its rail monopoly, which slaps very high shipping fees on oil products and thus subsidises coal shipments instead of slashing its own costs.  Alekperov also called on the state to annul export duties on crude produced in the Russian sector of the Caspian Sea, where LUKOIL is an active player, just as the government did in East Siberia.

The latter move is aimed at allowing oil firms to ship more crude to the new Pacific port of Kozmino, as Russia presses ahead with its strategy to conquer Asian markets.

"Europe remains our core market for crude," said Alekperov, adding that LUKOIL needed no more refineries in Europe after buying plants in the Netherlands and Italy.  More oil will flow to Europe, as LUKoil has just agreed with the owners of private pipeline CPC from Kazakhstan to Russia's Black Sea to accept 8 million tonnes a year of Caspian Sea crude at no discount when fields come on stream.

PetrolWorld 211209