24 June, 1997 - The LUKOIL-Reserve-Invest limited liability company on June 20 won a tender to buy 5% of shares which the LUKOIL oil company had until then held as collateral under the Russian President's Decree No. 889 of August 31, 889.

LUKOIL-Reserve-Invest made the highest bid of 251 billion rubles for the shares - the starting price having been 250 billion - and committed itself to meeting all the investment and social welfare terms of the tender.

Under the investment terms, LUKOIL-Reserve-Invest is to hand over to LUKOIL 15% of shares in joint stock company Nizhnevolzhskneft and deliver a jackup rig costing up to $100 million to the Caspian, where Russia has no such rigs today. The social welfare terms comprise a program of support for pensioners.

The block, 35,728,162 shares with a par value of 25 rubles, earlier declared state property, had been held as collateral by a consortium of the LUKOIL joint stock company and the Imperial bank, LUKOIL acting as the collateral holder and commissioner and Imperial as the creditor. The Russian government was lent $35.01 million in 1995. Under the terms of a loan-for-shares auction, LUKOIL’s subsidiaries had their debts canceled.

The commissioner had the right to sell the block as from September 1, 1996, in order to have the loan to the government paid off.

"We are satisfied that the LUKOIL-Reserve-Invest company has won," said chairman of the bidding commission Leonid Fedoun, LUKOIL Vice President. "This company has the practical opportunity to meet its commitments under the terms of the investment tender. All the legal terms of the tender have been met, which has been confirmed by our commission."

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