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TNK-BP to sell Udmurtneft to China's Sinopec

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TNK-BP said Tuesday it would sell Volga-region oil producer Udmurtneft to Chinese company Sinopec.

MOSCOW, June 20 (RIA Novosti) - TNK-BP [RTS: TNBP] said Tuesday it would sell Volga-region oil producer Udmurtneft [RTS: UDMN] to Chinese company Sinopec.

"The sides have exchanged letters confirming the commercial terms of the deal," the company said in a press release, adding that Udmurtneft assets were being sold as a going enterprise.

The deal is expected to be clinched in the near future, after final details are ironed out and a sale contract signed.

"The Federal Antimonopoly Service has okayed the deal," the company said.

"This is a positive development - it brings another major international investor working with strong Russian alliances into the country's oil and gas sector [and] reinforces Russia's pivotal role in global energy markets," TNK-BP President Robert Dudley was quoted as saying in the press release. "For TNK-BP it will allow us to concentrate more resources on our core exploration and production regions in Russia."

The Russian anti-monopoly watchdog allowed ten Russian and foreign firms to bid for a controlling interest in Udmurtneft.

The list included Sibneft, which was renamed Gazprom Neft in May; Russneft; and Kazakhstan's KazMunaiGaz; along with other firms including Austria's OMV and Hungary's MOL.

Gazprom Neft said Monday it could make a joint bid with Hungary's MOL to take control of Udmurtneft.

Udmurtneft, which has annual oil production of some 6 million metric tons (120,500 bbl/d), is currently developing 26 oil fields in the region. The company has charter capital of 3.56 million rubles (about $130,000), divided into 2,671,549 ordinary and 890,517 preferred shares, each with a face value of 1 ruble (about $0.03).

During preparations for the tender, Deutsche Bank, which acted as a consultant to TNK-BP on the sale of Udmurtneft, became the nominal owner of 99.49% of Udmurtneft's common stock, and 88.99% of its preferred non-documentary shares.

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