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LUKOIL buys Nelson stake for $1.1 bln

MOSCOW (Reuters) - Russian oil major LUKOIL has bought 57.64 percent of Toronto-listed Kazakh oil producer Nelson Resources for around $1.1 billion, the three firms which sold the shares said on Friday.

The transactions follow several weeks of uncertainty about whether a full $2 billion acquisition would go ahead after minority shareholders opposed it because LUKOIL offered to buy the firm at a discount to its market price.

But the principal shareholders, who consist mainly of Nelson's Kazakh managers and directors, decided to sell their stakes without waiting for a general shareholders meeting, which is due in late November.

On Thursday, Nelson said LUKOIL would buy 100 percent of Nelson for $2 billion if the deal is approved by 75 percent of votes cast at the general shareholders meeting.

The three firms, which sold their shares on Friday, are Cott Holdings Group Ltd, which sold 154,208,994 shares or 17.81 percent of Nelson for $337.97 million, Energy Investments International Ltd with 171,343,328 shares or 19.85 percent for $375.52 million and Central Asian Industrial Holdings with 172,501,884 shares or 19.98 percent for $378.06 million.

The firms are controlled by Nelson's directors Askar Alshinbaev, Mirbulat Abuov and Arvind Tiku, as well as Nelson's Baltabek Kuandykov.

LUKOIL has already borrowed $2 billion via Citigroup to acquire Nelson.

The Nelson deal, which would be the largest Russian acquisition abroad, would further spur competition for Kazakh energy resources as global oil majors and Chinese firms are scrambling for oil riches in the Caspian Sea region.

LUKOIL is already heavily present in Kazakhstan and has said it wants to expand further in a country with massive hydrocarbon reserves. Kazakhstan is set to become an important global oil player as it aims to triple oil output to 3 million barrels a day by 2015.

Nelson has proven and probable reserves of around 270 million barrels, but its total reserves in place could be potentially as high as 2 billion barrels. It produces 30,000 bpd and had net income of $36 million in the first quarter of 2005.

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