ConocoPhilips sells out of Russia

MOSCOW: US oil major ConocoPhilips has sold its remaining stake in Lukoil, Russia's largest privately-owned producer said Tuesday, bringing a formal to its seven-year involvement in Russia.

Lukoil said on September 26 that it would exercise an option to buy back the remaining six percent of its shares from ConocoPhilips after the US oil producer announced plans to shed its entire 20-percent stake in the firm.

The third-largest US energy company's holding, built up from 2004, was hailed as one of the most important international investments under the watch of then-president Vladimir Putin.

ConocoPhilips said its divestment from Russia was part of a concerted effort to improve shareholder returns, although analysts suggest that the US company may also be seeking to lower its risk exposure.

The Texas-based company initially bought a 7.6-percent stake in Lukoil in a 2004 deal that was personally overseen by Putin, who now serves as prime minister. It expanded that holding to 20 percent in 2006.

Lukoil did not say how much it had paid for the six-percent stake, noting only that ConocoPhilips had sold its previous holdings to Lukoil and a group of private investors for $5.82 billion (4.27 billion euros).

The US company decided to test the Russian market amid tensions caused by the 2003 arrest and subsequent conviction on tax evasion charges of Yukos oil company founder Mikhail Khodorkovsky.

The deal at the time was read as a sign that Western investors remained confident in Russia as an investment location.

Lukoil's buyback came just weeks after Russia's largest oil producer Rosneft, a state-run company, and Britain's BP agreed a deal to take a cross-shareholding in one of the biggest such tie-ups since the ConocoPhilips investment.