15th Apr 2011 14:45
BASHNEFT AND LUKOIL SIGN PARTICIPANTS' AGREEMENT REGARDING THE ESTABLISHMENT OF JOINT VENTURE AND THE TERMS FOR DEVELOPMENT OF THE TREBS AND TITOV OIL FIELDS
Moscow, Russia - April 15, 2011 - Sistema (LSE: SSA), the largest diversified public financial corporation in Russia and the CIS, today announces that Bashneft, a subsidiary of Sistema, and LUKOIL have signed an agreement to create a joint venture and establish the terms and conditions for the development of the Trebs and Titov oil fields.
According to the agreement, LUKOIL will pay RUB 4.768 billion for a 25.1% equity stake in a Bashneft subsidiary to which will be transferred the license for the use of subsoil fields, including the R. Trebs and A. Titov fields (the "Fields"), for geologic evaluation, exploration, and extraction of hydrocarbon reserves. The joint venture will in turn acquire 29 exploration wells located on the Fields from the LUKOIL Group of companies. The agreement also provides LUKOIL with minority protection for certain key issues, as is usual practice for oil consortiums.
The parties have agreed to transport the crude oil from the Fields through a pipeline to Lukoil's Varandey Oil Loading Terminal on the Barents Sea coast where it will be transferred onto tankers. The parties are considering the possibility of supplying the extracted natural gas to an energy centre of the South Khylchuyu oil field, which is being developed by Naryanmarneftegaz, a joint venture 70% owned by LUKOIL and 30% owned by ConocoPhillips. The resulting electricity production would be supplied to the oil production units at the Fields.
The parties intend to finance the joint venture's future operations in proportion to their respective equity ownership in the joint venture.
The closing of this transaction is contingent upon satisfaction of a number of conditions, including receipt of all necessary corporate and governmental approvals and negotiation and execution of various agreements relating to the operation of the joint venture.
Note to editors:
In February 2011, Bashneft was granted a 25-year licence for subsoil deposits, which include oil fields named after Roman Trebs and Anatoly Titov, located on a 2,151 square kilometres plot in the Nenets autonomous district of Russia. Total recoverable oil reserves (C1+C2) of both fields amount to 140.1 million tonnes.
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For further information, please contact:
| Sistema | ||||
| Investor Relations | Public Relations | |||
| Evgeniy Chuikov | Vsevolod Sementsov | |||
| Tel.: +7 (495) 692 1100 | Tel: +7 (495) 730 1705 | |||
| LUKOIL Public Relations Tel: +7 (495) 627 16 77
|
Bashneft
| Investor Relations | Public Relations | |||
| Maria Radina | Tatiana Zotova | |||
| Tel: +7 (495) 228 1596 | Tel.: +7 (495) 228 15 91 | |||
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Sistema is the largest diversified public financial corporation in Russia and the CIS, which invests in and is a major shareholder of companies serving over 100 million customers in the sectors of telecommunications, high technology, oil and energy, radars and aerospace, banking, retail, mass-media, tourism and healthcare services. Founded in 1993, the company reported revenues of US$ 7.3 billion for the third quarter of 2010, and total assets of US$ 42.0 billion as at September 30, 2010. Sistema's global depository receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the symbol "AFKS" on the RTS Stock Exchange, under the symbol "AFKC" on the MICEX Stock Exchange, and under the symbol "SIST" on the Moscow Stock Exchange (MSE).
ANK Bashneft is the parent company of Bashkir Oil and Energy Group, which is a top ten oil production company in Russia and the fifth largest oil processing Russian company. Bashneft sells its output in Russia and exports to Western Europe, the Czech Republic, Hungary, Kazakhstan and Ukraine. Bashneft trades on the Interregional Oil and Gas Exchange and the St. Petersburg International Mercantile Exchange (SPIMEX). ANK Bashneft employs approximately 22,000 people. Sistema JSFC is the majority shareholder of ANK Bashneft.
Today's LUKOIL is:
1.1% of global oil reserves and 2.3% of global oil production 17.8% of Russian oil production and 18.2% of Russian oil refining the 3rd largest non-state publicly traded oil company worldwide by proven reserves of hydrocarbons the 6th largest non-state publicly traded oil company worldwide by production of hydrocarbons the largest Russian oil business group with sales of over US$100 billion and net income of over US$9 billion the company with second largest trading volumes among foreign companies traded on the London Stock Exchange (IOB) in 2010 the first Russian company to receive full listing on the London Stock Exchange the only private Russian oil company whose share capital is dominated by minority stakeholders one of the largest tax payers of the Russian Federation. The total amount of taxes paid in 2010 is US$30.2 billion.Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. In addition, there is no assurance that the new contracts entered into by our subsidiaries referenced above will be completed on the terms contained therein or at all. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities of JSFC Sistema and/or any of its subsidiaries and affiliated companies, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the shares or securities of Sistema and/or any of its subsidiaries and affiliated companies.
Copyright Business Wire 2011
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