/REUTERS, Moscow, October 4, 05/ - Nelson Resourses may block its transition under control of Russian LUKOIL, as it is not satisfied with low offer price, head of Nelson informed on Monday.

Later it became known that Kazakhstan authorities might also affect this deal.

On Monday evening LUKOL spread application, which says, that the biggest in Russia oil producer bought 66.3% of Nelson shares.

The same day in the course of conference-call Nelson management tried to quiet investors, who are not satisfied with offer price, which is 15% below the market.

LUKOL offered 2.57 Canadian dollars against 2.96 at the moment of trades' conclusion at stock exchange in Toronto on Friday. On Monday quotations fell by three percents to 2.58 Canadian dollars per share.

According to Zana, the company still expects official application from LUKOIL, but has already created committee of independent directors and hired specialists of investment bank BMO Nesbitt Burns in order till October 12 to study offer of Russian party and estimate its justice.

At the end of September LUKOIl informed, that agreed with Nelson shareholders about purchase of 65%, simultaneously offered $2 bn. for the whole 100% block.

Nelson is sub-controllable to investors group from Kazakhstan, including Central Asian Industrial Holdings, Energy Investments International Ltd. and Cott Holdings Inc., which totally own 57% of shares.

ADVANTAGES AND RISKS

Experts of broker company Aton consider, that offer of LUKOIL underestimate oil reserves and indexes of Nelson. The biggest threat for Nelson investors is that company will increase its stake in Canadian firm.

Taking into account the interest, which the companies from China and India show to energy assets of Kazakhstan, money offer of LUKOIL looks specially unprofitable, some Nelson shares holders announced.

In august Chinese CNPC announced about intention to purchase Canadian oil firm PetroKazakhstan, which also works only on the territory of Kazakhstan, for $4.2 bn.

On Tuesday it became known that control over PetroKazakhstan defends also government of Kazakhstan, represented by state company Kazmunaigas.

Energy and Mineral Resources Minister of Kazakhstan Vladimir Shkolnik announced to reporters in Almaty, that deal of LUKOIl and Nelson Resources also will require approval from Kazakhstan authorities, as Nelson is local entrails user. He noted, that participants of prepared deal while have not informed about it official Astana.

LUKOIl also maintains wide scaled business in Kazakhstan, but strives for more expansion in the region, which will become one of the key on the map of oil production in nearest ten years.

[2005-10-04]