LUKOIL TO ENTER GERMAN OIL MARKET (Russia, Germany, Venezuela)

[bemildred]

MOSCOW, February 21 (RIA Novosti) - LUKOIL Vice-president Leonid Fedun is negotiating the purchase of a 50-percent stake in Germany's Ruhr Oel GMBH company, he said Friday, Finansoviye Izvestia reported.

Germany, Europe's largest fuel market, also ranks as the fourth largest fuel market in the world. Ruhr Oel accounts for nearly 20% of the entire German fuel market, annually refining 50 million tons of crude oil. British Petroleum and PdVSA (Petroleos de Venezuela) currently own 50% stakes each.

PdVSA has repeatedly tried to sell its stake in Ruhr Oel because it is difficult for PdVSA to turn a profit making daily crude oil deliveries to German refineries in light of sky-high global oil prices. Venezuela wanted to sell its Ruhr Oel stake to Russia's Alpha Group in 2003, with experts estimating the potential deal at $600-900 million. However, both sides did not sign the contract. According to experts, Ruhr Oel is such a lucrative slice of the German oil pie, that British Petroleum and Alpha may try to buy a stake in it.

LUKOIL now heads the list of contenders after Fedun's statement. Incidentally, the Russian company and PdVSA signed a joint understanding last year. LUKOIL President Vagit Alekperov went to Caracas in February to discuss $1-billion investment opportunities in oil deposits on Lake Maracaibo. The LUKOIL - PdVSA agreement also stipulates short-term and long-term crude oil and petroleum sales.

Novosti

[amandabeech]

1. Perhaps PdVSA will sell that oil formerly sent to Germany not to the US

but to China.

Why would Chavez ever sell more to a nation whose elected leader has tried to overthrow Chavez at least once? If I were Chavez, I'd be dealing with India, China and the rest of Latin America before I'd deal with the US.

Isn't PdVSA trying to sell its CITGO refineries here in the US?