Sibneft Completes Sale of ONACO Assets to TNK

Sibneft has completed the sale of its 38% stake in Orenburgneft and 1% interest in ONACO to TNK for $825 million. Sibneft received payment in two portions in April and will use up to $700 million from the proceeds to reduce debt by repaying higher-cost, shorter-term borrowing.

"Sibneft received the full, fair-market value of its ONACO assets," said Sibneft president Eugene Shvidler. "With this deal completed, we now can turn our full attention to working with TNK on the division of Slavneft."

Sibneft and TNK jointly bought a 74.96% stake in Slavneft, previously Russia's seventh-largest oil producer, in December for $1.86 billion. The two companies have decided to divide the assets on a 50:50 basis, however, the exact details of the split have yet to be completed. Since then, Sibneft has agreed to a friendly takeover by Yukos, a deal which will create one of the world's largest oil and gas groups, while TNK's shareholders agreed to sell a 50% stake in it to BP.