Thursday, June 26, 2008

LUKOIL faces delays in Venezuela, puts Cuba on hold

LUKOIL faces delays in Venezuela, puts Cuba on hold
Thu Jun 26, 2008 8:00am BST

MOSCOW, June 26 (Reuters) - Russia's No. 2 oil firm LUKOIL (LKOH.MM:
Quote, Profile, Research) has put plans to buy a refinery on Cuba on
hold because it is facing delays with oil production projects in
Venezuela, its president said in an interview on Thursday.

"Unfortunately, the signing of the Venezuelan projects has been
delayed.. The laws, which are being approved today by the country, are a
burden to its economy," Vagit Alekperov told Russian business daily

"So we cannot afford to take the risk of viewing these projects as a
source of supply of the Cuban refinery. And to buy a refinery without
having crude supply logistics does not make sense," he said.

LUKOIL is 20 percent-owned by U.S. oil major ConocoPhillips (COP.N:
Quote, Profile, Research) and has a large network of filling stations in
the United States.

Alekperov said one of the reasons why LUKOIL was keen to stay in
Venezuela and launch production projects as soon as possible was the
need to supply its U.S. network.

He also said LUKOIL would save around $1 billion per year due to
introduction of new tax breaks by the Russian government from next year.
(Writing by Amie Ferris-Rotman, editing by William Hardy)

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