Mr Alekperov expressed doubt that ConocoPhilips would be able to buy out a block of shares in LUKOIL. He also said that the stake on offer was too small for the successful bidder to make it onto the LUKOIL Board of Directors.
The LUKOIL CEO told the media that the company's top management had no plants to sell off their own stake, but stopped short of specifying its size.
The government's 64,638,729 shares, or a 7.59 percent stake, in LUKOIL is to be sold off in a lump, and through open bidding. The face value of each share is 0.025 roubles.
The LUKOIL stake has been put up for sale in keeping with the government's 2004 privatization plan and its federal property privatization guidelines through 2006.
A prime ministerial resolution has charged the Economic Development and Trade Ministry with administering the bidding process. The successful bidder is to be announced in the third quarter of 2004.
LUKOIL is now considering a number of offers from foreign companies with regard to the development of Iraq's Western Qurna oil field, Mr Alekperov reported. But he said negotiations with foreign partners would not be possible until after stability was restored to Iraq.
"The project has been mothballed. Offers are now coming in from foreign companies, but we haven't decided on a Western partner as yet," he said. But "given the U.S.' influence in Iraq, it would be beneficial to cooperate with an American company," he added.
The contract for the implementation of the Western Quarna project's second leg, or Western Qurna 2, was signed on March 21, 1997, between the Oil Ministry of Iraq, LUKOIL, the Russian foreign trade agent Zarubezhneft and the machinery importer Mashinoimport.
Under the terms of the Product Sharing Agreement, the contract is valid for a period of 23 years, and may be extended by another 5 years. LUKOIL's share in the project is as much as 68.5 percent, while Zarubezhneft and Mashinoimport have 3.25 percent each. Iraq is involved through its company SOMO, with a share of 25 percent.
Western Quarna's proven oil reserves are estimated at 6 billion barrels. The overall output throughout the contract's validity period may reach 4.8 billion barrels of oil and 56.4 billion cubic meters of petroleum gas. Prospective capital investment in the project totals $4 billion.
