ConocoPhillips expects to recognise an after-tax financial gain of approximately $400 million for the sale
ConocoPhillips [NYSE:COP] has sold its 30% interest in NaryanMarNefteGaz (NMNG) along with "certain related assets" to its 70% joint venture partner LUKOIL, the companies have said in respective statements.
Financial terms of the transaction were not disclosed, although ConocoPhillips said it expects to recognise an after-tax financial gain of approximately $400 million for the sale.
"The sale of this non-core quality asset is an important component of our divestiture program for 2012," said Don Wallette, executive vice president, Commercial, Business Development, and Corporate Planning.
"We are pleased that LUKOIL, the co-owner of NMNG, recognizes the value of this asset," he added.
LUKOIL is aiming to strengthen and consolidate positions in its key upstream region
The Houston, Texas based company said the move was part of its ongoing strategy to reposition its asset base.
LUKOIL said that "in view of the sale of ConocoPhillips' 30% interest in NMNG as part of its divesture program for 2012, LUKOIL is aiming to strengthen and consolidate positions in its key upstream region - Timan Pechora oil and gas province."
The NMNG joint venture was established in 2004 to develop oil and natural gas resources in the northern part of Russia's Timan-Pechora province.
Production from NMNG is transported via pipeline to LUKOIL's Varandey Oil Export Terminal at Varandey Bay.
In 2008, LUKOIL said it completed an expansion of the terminal's gross oil-throughput capacity to 240 MBD.