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Russia's LUKOIL postpones international projects

Russia's LUKOIL has no deal for now to buy a stake in Spain's Repsol as it delays overseas projects and steps up pressure on Moscow to join OPEC's oil output cuts, LUKOIL head Vagit Alekperov said.  

“We currently have no agreements on Repsol,” Alekperov told reporters on Monday.

LUKOIL is Russia's second-largest oil firm and the country's most active abroad with projects from the Caspian Sea to South America. Alekperov's comments are the first by the company on Repsol.

They come one month after speculation that LUKOIL was seeking to buy up to 30% in the Spanish energy company.

Minority investors in the private Russian firm were angered at the potential purchase of a stake in Repsol for up to €10.7 billion ($14.41 billion) and said they would rather see the firm investing in its own stock or production at home.

“We have put off large international projects,” Alekperov told a roundtable discussion, without giving details. He added that investments next year and in 2010 would be reduced, but did not elaborate on which areas would be affected by the cuts.

He said LUKOIL hoped to stick to its plan to develop projects in the Russian regions of West Siberia and Arctic Yamal.

Alekperov said he believed OPEC was expecting Russia to offer output cuts of 200,000 barrels per day (bpd) to 300,000 bpd and said his firm would contribute if the Kremlin agreed.

“In OPEC they say that Russia could cut by 200,000-300,000 bpd. It is up to the government to decide. If a decision to cut is taken, we will follow it,” he said.

When asked over which time period the cut would last he said: “The overall production in 2009.”

Late last week Russian President Dmitry Medvedev said Russia would do anything, from cutting oil production to joining OPEC, to defend its national interest and push up energy prices.

Rising energy prices in the last eight years have fuelled Russia's economic boom but the oil price has fallen $100 from a record high of more than $147 in July. This has encouraged Russia, the world's second largest supplier after Saudi Arabia, to work with producer group OPEC.

LUKOIL, in which US major ConocoPhillips has a 20% stake, is one of the most active Russian investors in foreign energy assets.

It entered Venezuela in 2005 by signing an initial agreement on geological exploration at the Junin-3 deposit. It has repeatedly said it seeks more projects in the South American country.

LUKOIL also holds 70% of the Condor oil deposit in Colombia and has said it has placed its hopes in the field, with reserves estimated at 35 million barrels, becoming the country's largest oil field.

The company also has stakes in projects in Kazakhstan, Azerbaijan, Uzbekistan, Egypt, Iran and Saudi Arabia.

The firm has said it also views Africa as one of its potential growth regions and had planned to expand exploration in Ghana and Ivory Coast over the next few years. (Reuters)