Russia's second largest oil company considers buying Williams refineries

Posted: Thursday, August 29, 2002

MOSCOW (AP) -- Russia's second-largest oil producer OAO Yukos said it's considering purchasing two oil refineries in North Pole and Memphis, Tenn., from Williams Cos.

However, a Yukos spokesman declined comment on a report by Russian daily Vedomosti that Williams, of Tulsa, Okla., has offered Yukos a preferential price for the refineries.

''Williams has publicly announced the sale of the refineries and Yukos hasn't yet made a decision whether to buy them or not,'' the spokesman told Dow Jones Newswires.

Last week, Williams agreed to sell its 27 percent stake in the Lithuanian refinery complex Mazeikiu Nafta to Yukos for $85 million.

Williams' asset sale is part of an overall plan to create a net $8 billion improvement in the company's finances in the next year. To date, Williams has raised about $5 billion.

Meanwhile, a source close to Yukos said the company is unlikely to bid for the two Williams refineries and dismissed the published report on the issue as misleading.

Analysts are skeptical of the value to Yukos of the two refineries, despite its stated intention of becoming a supplier of crude to the U.S. market in the long term.

The company is still evaluating the economics of a series of crude shipments which started in July.

''Yukos requires a broader, well thought-out strategy of expanding into U.S. markets if it wants to make (an investment in Williams' refineries) work,'' analysts at Moscow brokerage Aton Capital said in a research note Monday.

Williams posted revenue of $11.03 billion last year.

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