Actuality January 30, 2008

Public Corporation LUKOIL came to an agreement with the Financial Group “IFD Kapital” about purchasing about 80 % of stocks of Public Corporation SGC TGC-8 at the price equivalent to 640-660 dollars for 1 kilowatt of installed capacity. It is said in LUKOIL official message.

The transaction will be effected after reception of all necessary corporate approvals, and also after reception of the consent of federal antimonopoly service of the Russian Federation.

According to the reached arrangements within the limits of calculations on the transaction LUKOIL will transfer to the Financial Group “IFD Kapital” about 23,5 million of treasury stocks of Public Corporation LUKOIL at the price established by the decision of the company board of directors. These stocks were earlier bought out by Public Corporation LUKOIL on the open market.

Public Corporation SGC TGC-8 is one of the largest consumers of gas in Southern federal district of Russia with annual consumption of about 6 billion cubic meters of gas a year. Company power stations are located in the Astrakhan, Volgograd, Rostov regions, Krasnodar and Stavropol territories, Republic Dagestan.

The installed capacity of generation objects of electric and heat energy of Public Corporation SGC TGC-8 makes 3601 megawatt and 13 366 Gcal per hour respectively. In the whole in the regions of the company location the share in the electric power market makes about 17 %, heat power – about 60 %. In 2006 the consolidated earnings of the company made up RUR14,3 bln, and net profit made up RUR 3,4 bln ($136 mln).

LUKOIL expects considerable synergistic effect from acquisition of Public Corporation SGC TGC-8 actives at the expense of deliveries of natural gas to Public Corporation SGC TGC-8 stations from the gas deposits of the company located on the Northern Caspian Sea and in the Astrakhan region.
In future LUKOIL plans to develop electrical power business. In the next five years the investment program of Public Corporation SGC TGC-8 includes building of stations with total capacity more than 1000 megawatt both within the bounds of construction of new power objects, and within the bounds of replacement of mortal capacities. Presently, on Public Corporation SGC TGC-8 accounts there is RUR 24 bln ($960 mln) attracted by the company within the bounds of additional issue of stocks.