Russia Abandons Lukoil Sale, Goes Ahead with Slavneft Sale
The Russian government cancelled its offer of 5.9% of Lukoil, stating it did not need $700 million badly enough to accept investors' price for its stake in the energy giant. Lukoil still expects to proceed with plans to have its shares listed on the London Stock Exchange on August 6, making it the first Russian company with a full listing on the exchange.
The government did say, however, that it will go ahead with the privatization of Slavneft. Original plans called for the privatization of 19.68T in Slavneft after selling its 5.9% stake in Lukoil on international markets but the Lukoil sale fell through. "The privatization of Slavneft will not be delayed further. We shall sell the 19.6% stake this year at auction in Russia," according to Alexander Braverman, First Deputy Property Minister. The state owns 75T of Slavneft with Belarus holding about 11% and private investors holding the remainder.
The company produces 325,000 barrels per day but last year said it had made a huge oil find in the eastern Siberian field of Kuyumbinsky with estimated hydrocarbon reserves of 2.5 billion barrels.