ConocoPhillips and Lukoil finalise Russian venture

ConocoPhillips and Russia's Lukoil on Friday said they have finalised a joint venture to develop energy fields in the north-west portion of Arctic Russia as part of a broader strategic alliance. Houston-based ConocoPhillips spent $500 million to acquire a 30 percent stake in the Naryanmarneftegaz joint venture, which will be governed on a 50/50 basis,
Shares of ConocoPhillips rose 72 cents, or 1.25 percent, to $58.21 in early trading on the New York Stock Exchange.
The latest venture is part of a larger strategic alliance between the companies formed last September under which ConocoPhillips bought an 11.3 percent stake in Lukoil's ordinary shares through March 31.
ConocoPhillips may increase its stake in Lukoil up to 20 percent under the deal.
The latest Arctic venture should produce and market 200,000 barrels of oil equivalent per day at peak, the companies said.
Production from the joint-venture fields is expected to be shipped over pipeline to Lukoil's existing terminal at Varandey Bay on the Barents Sea and then carried by tanker to international markets, the companies said.
Lukoil will expand the terminal's capacity to 240,000 BOEPD in 2007, with ConocoPhillips participating in the design and financing of the terminal, the companies said.