The Agreement:
a) governs cooperation between the parties in developing a coherent and effective structure for mutual relations between oil exploration and production companies controlled by the Company and the Group of Companies that operate in the Russian Federation and in the Republic of Kazakhstan;
b) defines the capital structure of the transaction under which the Company is to acquire stakes in the Group of Companies; and
c) defines the follow-up activities of the due diligence process and updating of detailed geological and financial data.The Agreement has been concluded for a period of three months.

At the same time, the Parties have committed to use their best efforts in ensuring that the final terms and conditions of the transaction of purchase by the Company of stakes in the Group of Companies are agreed not later than two weeks prior to its expiry.

The conclusion of the Agreement allows for supplementing the Company’s investment portfolio with entities holding significant proven deposits of crude oil and engaged in profitable oil production operations. Furthermore, it marks a major expansion of the level of cooperation beyond the scope outlined in the Letter of Intent of July 26, 2007, by providing the Company with an opportunity to leverage organisational structures, trade contacts and know-how of the Group of Companies for the purpose of integration of the entire process of exploration and extraction of hydrocarbons pursued by the companies from Petrolinvest Group in the territory of the Republic of Komi as well as joint evaluation of subsequent potential acquisitions of hydrocarbon deposits in the territory of the Russian Federation.

Download Current Report No. 27/2007