Sibir Energy has acquired from Richard Enterprises Limited 18.36% of the total share capital of Mosnefteprodukt in a cash transaction valued at $34.9 million. The deal includes the purchase of 6,318,978 ordinary shares and 26,329 preference shares in Mosnefteprodukt and brings Sibir's total stake in the company to over 69.94%.

Mosnefteprodukt is involved in distribution of refined oil products via a network of terminal facilities in Moscow and the Moscow region and retail sales of motor fuels through a network of "Nefto" branded service stations in the Moscow region. The "Nefto" branded petrol-station network has suffered from years of under-investment and Sibir has targeted roughly half of the 63 stations for demolition and rebuild over the next five years in a targeted $75 million investment program.

Sibir CEO, Henry Cameron, said, "Sibir's acquisition of an enhanced stake in Mosnefteprodukt is part of its ongoing strategy to enhance and upgrade its presence in the distribution and retail sales of motor fuels in Moscow and the Moscow Region. This strategy builds on Sibir's strong existing presence in retail fuels through its MTK branded network in Moscow and benefits from Sibir's strategic supply position at the Moscow Refinery.

Following closely on the announcement of disposal of our interest in BP-branded retail network this deal yet again demonstrates Sibir's firm commitment to development of our majority owned downstream assets."

Tags: Sibir Energy