* Samara-Nafta produces 50,000 barrels per day
* LUKOIL trying to stabilise oil production
* Hess has 90 pct stake, to get $1.8 bln after tax
By Vladimir Soldatkin
MOSCOW, April 1 LUKOIL, Russia's
second-largest crude oil producer, agreed to acquire small
producer Samara-Nafta for $2.05 billion from Hess Corp
as part of a long-term strategy to stabilise falling oil output.
Samara-Nafta produces around 50,000 barrels per day and is
headed by Simon Kukes, former chief executive of now defunct
YUKOS oil company and of TNK, which was folded into TNK-BP
assets in 2003.
It has around 85 million tonnes of 1 and 2 category oil
reserves, a classification which is close to probable and proven
reserves, LUKOIL said. Its production assets are located in the
Volga river regions of Samara and Ulyanovsk.
"The above transaction harmonises with the company's
development strategy until 2021, which provides for
stabilization and growth of the oil production rate in Russia",
LUKOIL President Vagit Alekperov said in a statement on Monday.
LUKOIL's oil production has been on the decline for three
years due to an increasing rate of depletion of fields in West
Siberia as well as disappointing output at its new deposits in
the Timan-Pechora region in northern Russia.
Hess said that, based on its 90 percent stake in
Samara-Nafta, its total after-tax proceeds from the deal would
amount to about $1.8 billion.
The transaction is part of the U.S. company's plan to sell
assets including in the UK, Texas and Azerbaijan and use the
proceeds totalling $3.4 billion so far this year to reduce debt
and strengthen its balance sheet so that it can fund growth and
return capital to shareholders, it said.
As of 1441 GMT, LUKOIL shares were down 1.2 percent, while
Hess shares were up over 2 percent.
The deal is subject to approval by the Russian government's
LUKOIL has been aggressively increasing its resource base by
buying into overseas upstream projects, including the West
Qurna-2 field in Iraq.
Russian newspapers and agencies have reported that Bashneft
and Gazprom Neft were among the bidders for