Giant Russian oil conglomerate LUKoil completed its first auction of shares for cash Thursday and plans to use the funds for oil production and other investment projects, company spokesman Alexander Vasilenko said.


"Applications (to buy shares) are now being gathered and processed. We will probably have the results in two weeks," he said.


The auction included stakes of less than one percent in LUKoil Holding and nine LUKoil divisions.


An official at the NIKoil investment company, which LUKoil appointed to handle the auction, said bids had been taken for the entire offering, including 77,410 shares in the holding company that represented 0.076 percent of charter capital.


The official, Anatoly Darakov, said the maximum price offered for shares in LUKoil Holding was $40.50 and the average $37.65. In Moscow's over-the-counter market, LUKoil Holding shares are quoted at about $40.


The company also offered shares in its main production units, Langepasneftegaz, Urayneftegaz and Kogalymneftegaz.


Darakov said 11,166 shares (0.039 percent) were bid for in Langepasneftegaz (maximum price $12, average $11), 17,888 (0.262 percent) in Urayneftegaz (maximum $10, average $8.21) and 55,769 (0.381 percent) in Kogalymneftegaz (maximum $46.8, average $43.37).


LUKoil's Vasilenko said income from the cash auctions would go to several investment projects.


"There are concrete programs in Kogalym and Langepas, as well as in Azerbaijan," he said. LUKoil has a 10 percent stake in a $7 billion project with a foreign consortium to develop three Caspian Sea fields in Azerbaijan.


Vasilenko said the company also planned to reconstruct its oil refineries in Perm and Volgograd and build a new refinery in Novorossiisk.


The third area for investment was in improving distribution of oil products, with the establishment of a network of petrol stations, he said.


LUKoil is being audited by international consultancy KPMG Peat Marwick ahead of a planned placing of 15 percent of its shares with foreign investors. The independent Russian consultancy AK&M said the company's shares could rise fivefold if it was successful.


Vasilenko said LUKoil Holding would increase its assets with the addition of two new oil and gas enterprises -- Astrakhanneftegaz and Nizhnevolskneft. These firms, currently controlled by state holding company Rosneft, are expected to come under LUKoil's wing under a presidential decree completing the formation of new vertically integrated oil companies