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BRUSSELS, Belgium -- The European Commission gave its clearance to U.S. oil giant ConocoPhillips's $370 million purchase of a 30 percent stake in Russia's Lukoil Holdings oil exploration and production company Naryanmarneftegaz, reported the Associated Press.
The European Union head office said the deal did not violate EU competition rules. Houston-based ConocoPhillips's purchase would give the third-biggest U.S. oil company a stake in exploring and developing the Timan-Pechora region of northern Russia.
The joint venture would see the shipment of crude oil to the United States, where it would be processed at one of ConocoPhillips's refineries and then sold at Lukoil's gas stations. Lukoil owns about 2,000 stations in the United States, 795 of which were acquired from ConocoPhillips earlier this year.
The deal in Timan-Pechora creates a venture with access to more than 2 billion barrels of crude. Although ConocoPhillips will only have a 30 percent stake, management of the project will be shared equally. This deal is an expanded version of a preliminary agreement the two oil companies signed in 1998.
Before talks with ConocoPhillips intensified this year, Lukoil had planned to go it alone in Timan-Pechora by investing $3 billion by 2012. Separately, ConocoPhillips won the Russian government's privatization auction in late September for a 7.6 percent stake in Lukoil by agreeing to pay close to $2 billion.
ConocoPhillips's purchase of the Lukoil stake is the largest amount ever pledged at a privatization auction in post-Soviet history. It's also the largest acquisition in Russia since British Petroleum PLC paid $7.7 billion for a 50 percent stake in its Russian oil venture.