Our correspondent says the auction lasted for about three minutes. The first bid was made by Promsvyazbank, which expressed readiness to buy the government’s stake in LUKoil for the starting price of $1.928bn. The next bid was made by Promregion Holding, which offered $1.934bn. But String Time Holdings Limited offered $1.988bn and won the auction.

LUKoil officials said they were pleased with the results. According to the company’s Vice President Leonid Fedun, this is the largest privatization deal. He said the high price of the stake confirmed that LUKoil’s capitalization was high. “As a shareholder, I am very much pleased,” Mr. Fedun said.

LUKoil stock, rising steadily on the MICEX and RTS, dropped 1.5 percent as of 12:38 Moscow time.

The government announced its decision to sell its stake in LUKoil back in July 2004. The starting price was $1.928bn ($29.83 per share).

LUKoil’s authorized capital is RUR 21.264m. It is divided into 850.563m ordinary shares. A 63.3 percent stake in the company is in nominal control of ING Bank (Eurasia).

US companies ConocoPhillips and Dabir International took part in the auction, as well as Russia’s Promsvyazbank and IFD Capita. ConocoPhillips, which has many join projects with LUKoil, was seen as the most likely winner.

LUKoil expects that its profits will be 2-2.5 times higher in 10 years time. In 2003, the company’s revenue rose 40 percent to more than $22bn, and its net profit increased to $3.7bn. In 2003, the company increased investments in hydrocarbon exploration and production from $1.41bn to $1.78bn. Investments in Russian projects amounted to $1.5bn, and in foreign projects - to $247m.

LUKoil accounts for 1.5 percent of global oil reserves, 2 percent of the world’s oil production, and for 19 percent of Russian oil production and processing. LUKoil is the world’s second largest oil company in terms of proven oil reserves, and it is the sixth largest producer of hydrocarbons.

ConocoPhillips is the world’s sixth largest company in terms of reserves and production. ConocoPhillips’ net profit in the second quarter of 2004 increased almost twofold to $ 2.08bn. The company’s revenue was $31.9bn, against $25.6bn a year earlier.