MOSCOW, April 2 - RAPSI. Russian oil giant Lukoil is set to purchase Samara-Nafta, a smaller regional oil company, from international energy company Hess Corporation for $2.05 billion, but the sale will not be final until approved by Russia's Federal Antimonopoly Service, according to a statement issued by Hess Monday.
The company plans to move forward with its application for the Russian authorities' approval next week.
This is the latest in a series of major sales for the company. According to its statement, since the start of 2013 it has sold off interests in the UK, North Sea, Texas, and Azerbaijan. Between these and the Samara-Nafta sale, Hess will have gained proceeds amounting to about $3.4 billion.
US-based legal news agency The American Lawyer reported Monday that Hess has sought the legal expertise of law firm White & Case, while Lukoil has turned to law firm Akin Gump Strauss Hauer & Feld. According to the report, the Hess Corporation is bracing for impact due to ongoing difficulties with an activist investor.
Hess Chairman and CEO John B. Hess explained that the sales have been part of a large-scale program aimed at evolving the company: "As the sale of Samara-Nafta indicates, we are making excellent progress in executing our asset sales program, which is a central component of our plan to transform Hess into a more focused, higher growth, lower risk pure play exploration and production company. Just as important, by applying the proceeds from these divestitures to reduce debt and strengthen our balance sheet, Hess will have the financial flexibility both to fund its future growth and also to direct most of the proceeds from additional asset sales to returning capital directly to its shareholders."
Hess is in the business of the exploration and production of crude oil and natural gas, according to its website.
According to its website, Lukoil is the largest private oil and gas company in the world based on oil reserves, and the fourth largest based on global oil production. It credits itself with 2.2% of crude oil produced globally, and claims a revenue of $133 billion.
Hess Corporation described Samara-Neft as currently producing 50,000 barrels of crude oil daily in Russia's Volga-Urals region.