Sibir Energy To Increase MOGC Stake To 45%

MOSCOW. (Interfax)- Britain's Sibir Energy plans to complete a deal over the next four months to include a 95% stake in OAO Magma in the charter capital of OAO Moscow Oil and Gas Company, thereby increasing its stake in the company from 31% to 45%, Sibir Energy General Director Henry Cameron said at a press conference in Interfax on June 30. He said that the 31% Sibir Energy stake in MOGC is represented by shares in Yugraneft, which owns less than 1% in a joint venture with Sibneft- Sibneft-Yugra. Cameron said that he understands that these assets do not have any real value.

The Yugraneft stake in Sibneft-Yugra was diluted from 50% to 1%. Cameron said that the company plans to recover the misappropriated assets. He said that the company would protect its legal interests and that it will not leave alone any corporate entity or private individual that participated in the illegal acquisition of these assets.

Dmitry Afanasyev, a partner at EPAM, which represents the interests of Sibir Energy, said at the press conference that information about the increase in Sibneft's stake in Sibneft-Yugra was disclosed in the company's financial report to U.S. GAAP. "On page 17 of the report it was noted that the company increased its stake to 99% for a nominal charge. This is not included in the Russian report," Afanasyev said.

He said that in 2001 Sibneft Vice President Andrei Matevosov was appointed as general director of Sibneft-Yugra for the period during which licenses for the development of the southern part of the Priob field and the northeastern part of the Palyanovsky section of the Krasnoleninsky field were transferred from Yugraneft to Sibneft-Yugra, in accordance with the joint venture agreement between Sibir Energy and Sibneft. In 2002 it was decided to remove Matevosov, however "he continued to use his authority." After this at a meeting of Sibneft- Yugra shareholders on September 28, 2002, David Davidovich- head of the Moscow office of Millhouse Capital, acting on behalf of Matevosov and Sibneft First Vice President Alexander Korsik, decided to increase the joint venture's charter capital by $2,848, and also to sell 45% of its shares to the offshore company Shaw, Carroll and Tranquillo. As a result, the Yugraneft share fell from 50% to 5%.

After this, at a shareholders' meeting on February 4, 2003, Davidovich, Korsik and representatives from these offshore companies decided to increase the charter capital by a further $13,291, as a result of which the Yugraneft share in the joint venture fell from 5% to under 1%.

Sibneft announced earlier that the agreement with Sibir Energy to set up a joint venture includes the possibility of Sibneft increasing its stake to 100%, in addition- Sibneft financed the project in full and invested about $300 million in it.