Yukos and Sibneft have agreed in principle to combine the two businesses in the largest-ever industrial transaction in Russia. The combined oil & gas group will not only be the largest in Russia but will also rank as world’s fourth largest private oil producer. The combined group (including Slavneft reserves) would have total reserves of around 19.4 billion barrels of oil and gas equivalent, based upon year-end 2001 reserves calculated in accordance with SPE methodology. Daily crude oil production is approximately 2.3 million barrels including Sibneft’s share of Slavneft. The combined entity will be named YukosSibneft Oil Company. It is expected that Yukos’s Mikhail Khodorkovsky will be responsible for the executive management of the new group, while Sibneft’s Eugene Shvidler will be proposed as chairman of the board of directors. The core shareholders intend that independent directors will constitute a majority of the board.
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