Saturday, January 03, 2009

ConocoPhillips' Stake in LUKOIL Losing Billions

The 2006 acquisition of a 20 percent stake in LUKOIL by ConocoPhillips (COP-$54.85), initially applauded by energy analysts because it increased production growth prospects by opening access to the Russian market, could prove to be an expensive investment, and will likely lead to an asset write-down if oil prices and demand continue to weaken… Read More….

The aggregate market value of ConocoPhillips’ ownership stake in LUKOIL declined to $5.63 billion at year-end, or $$7.24 billion below the stated $12.86 billion book value. If the loss in the carrying value of the investment proves to be "other than temporary," the company would record a non-cash impairment of the holding.

Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.

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