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THE TIMES (UK): Sibir scents victory in battle with Sibneft: ďSibirís main focus is the Salym oil joint venture with Shell in western Siberia. The partners hope to extract 600 million barrels of crude oil.Ē (ShellNews.net) 22 Dec 04

 

By Peter Klinger

 

SIBIR ENERGY, the AngloRussian oil and gas company, said yesterday that it was confident of winning a bitter legal battle with Sibneft, the oil group controlled by Roman Abramovich, owner of Chelsea Football Club, over ownership of a key Russian oilfield.

 

Sibir has engaged lawyers in Russia and in Britain, where its shares are traded, as part of efforts to reclaim a sizeable stake in the Sibneft-Yugra venture. Sibirís stake was about 50 per cent before it was diluted, illegally according to Sibir, to less than 1 per cent this year.

 

The Sibneft-Yugra venture was established in 2000 to explore the oil reserves of the Priobskoye field in Siberia. At one stage Sibirís stake in the venture accounted for more than 20 per cent of its total assets and the escalating dispute with Sibneft forced Sibir in April to ask for its AIM- traded shares to be suspended.

 

Analysts have attributed no value to Sibirís disputed Yugra venture stake.

 

Sibirís shares resumed trading yesterday, closing down 64p at 216p after the company updated shareholders on its reorganisation and trading. The reorganisation included a one-for-ten share consolidation. Sibirís main focus is the Salym oil joint venture with Shell in western Siberia. The partners hope to extract 600 million barrels of crude oil.

 

Sibir was under pressure to continue paying its share of Salymís huge development costs or risk losing its equity in the project, but it was able to secure a last-minute $150 million loan package from Chalva Tchigirinski, its biggest shareholder. In return for providing the loan, Mr Tchigirinskiís holding in Sibir will increase from 42 per cent to 52 per cent.

 

Sibirís other asset is a stake in a Moscow petrol station and fuel depot network.

 

Sibir said that its trading division had contributed a $21 million (£10.8 million) gross profit for the seven months to September 30, a figure that was likely to swell to $40 million by the end of the year.

 

Cannacord, Sibirís house broker, has placed a 363p to 474p net asset value on the oil company but a 272p share price target. But the broker gave warning that Sibirís history and the general uncertainties in Russia following the dismantling of Yukos were likely to result in a ďfurther significant discount being applied by the marketĒ.


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