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Russia's VEB buys stake in LUKOIL

Russian state bank VEB has acquired a stake in Russia's largest private oil company, LUKOIL, the company said in a statement, without specifying the size of the stake or when it was bought.

Sources close to both the bank and the oil major, however, said that a stake of less than 5% had been acquired.

The government has been snapping up significant assets and equity stakes in recent months as the global financial crisis lowers company valuations, capitalizing on the downturn to gain greater control of strategic industries.

LUKOIL, in which ConocoPhilips holds a 20% stake, is seen as one of the last bastions of private ownership in an industry heavily dominated by the state. About 28% of its shares are publicly traded.

Spokespeople for both LUKOIL and VEB declined to elaborate on the terms of the deal.

“The Company welcomes VEB, one the largest state financial institutions in Russia and a strategic investor in the real economy, as one of its investors,” LUKOIL Vice President Leonid Fedun said.

At the end of last year, VEB spent some 155.8 billion rubles buying up shares and bonds of 15 Russian companies as part of a government drive to support the local markets.

Norilsk Nickel announced last week that VEB had acquired 3.7% of its shares through the support program.

VEB was also buying up shares of Gazprom, Sberbank, Rosneft, VTB and Surgutneftegaz. (Reuters)