Sibneft Acquires Slavneft in Auction

Sibneft, the fifth-largest oil company in Russia, was the high bidder on the 75% stake of Slavneft with a bid of $1.86 billion. This was the Russian government's largest privatization sale of the year. The amount, slightly above the state's starting price of $1.7 billion, will help the government pay a huge a $17 billion foreign debt bill next year.

The win confirms Sibneft as the country's fastest-growing oil firm, and will likely catapult it into the top three Russian producers by 2005.

It was won by a company called Invest Oil, but the bid was made by Sibneft President Eugene Shvidler. The list of bidders included seven companies, none of them familiar names. Three of them were thought to have been affiliated with Sibneft and another three to Russia's fourth-biggest oil firm, TNK. The last was unknown.

Slavneft produces 320,000 barrels a day, mainly from fields in western Siberia. It also has refining capacity of 600,000 barrels per day, with plants in Russia and Belarus.