Lukoil Buys BP's Stake in LUKARCO, Becomes 100% Owner

BP has divested its interest in Kazakhstan's Tengiz oil field and the Caspian Pipeline Consortium (CPC) pipeline, carrying oil between Kazakhstan and Russia, by selling its 46 percent stake in LUKARCO B.V. to Russia's Lukoil. As a result, Lukoil has become the owner of a 100 percent stake in LUKARCO.

Lukoil, which already owns 54 percent of LUKARCO, will pay $1.6 billion in cash in three instalments over the next two years. A $43 million BP loan will also be repaid to BP by LUKARCO. LUKARCO owns a 5 percent share in TengizChevroil (TCO), which produces oil from the Tengiz field, and a 12.5 percent interest in CPC.

David Peattie, BP's head of Russia and Kazakhstan, said, "We are pleased to have concluded this sale with Lukoil, which follows our earlier transaction with KazMunaiGaz. We wish CPC every success in achieving the planned expansion of the pipeline which is important to Kazakhstan and Russia. We greatly appreciate the support for this sale from Transneft, KazMunaiGaz, the CPC shareholders and TCO partners and the governments of both countries."

The sale has been approved by the Government of the Republic of Kazakhstan, CPC shareholders and TCO partners.

The sale to Lukoil means that BP has no remaining share in CPC or Tengiz. In April 2009 BP sold its 49.9 percent stake in Kazakhstan Pipeline Ventures (KPV), which held a 1.75 percent share in CPC, to state-owned KazMunaiGaz for $250 million.