Lukoil Sell-Off at Home, Abroad

Russia's largest independent oil company, Lukoil, announced Friday that it was planning a large share issue inside Russia as well as the sale of 15 percent of the company to Western investors by the middle of next year.Lukoil's vice president, Leonid Fedun, told a news conference that the oil giant would let investors buy in so the company could expand and go international. He said Lukoil would sell a 2.4 percent stake to major Russian investors and a 10 percent stake to the general Russian public this year, and 15 percent to foreign companies next year."We need the funds for the development of the company, for increasing extraction and developing infrastructure," Fedun said.Lukoil president Vagit Alekperov said the company was actively seeking ways to expand internationally, but it was not strong enough yet to undertake independent projects on the international market."We have too little experience yet and we're not as strong legally as we should be," he said. "We need to change our accounting procedures in accordance with Western standards and have international experts confirm that we own the huge oil reserves we know we own."While Lukoil does not operate independently abroad, it works with the French firm Agip on a project in Tunisia and has joint ventures in the Czech Republic and Lithuania.In another move to conquer the international market, Lukoil is preparing to sign a major deal with Chevron. According to Interfax, the American corporation intends to buy 70,000 barrels of crude oil a day from Lukoil.Lukoil executives said the company had sold off about 7 percent of its shares for 3.5 million privatization checks during voucher privatization, but that a second voucher auction covering 10 percent of the company stock had never materialized because the government procrastinated."The State Property Committee said it approved the issue," Fedun said. "But in fact, they only finished processing the papers last month when it was too late."But we're not giving up," he continued. "If we couldn't sell that 10 percent for vouchers we're going to sell it for money. Our goal is to make as many people as possible our investors.