StockMarketWire.com - French giant Total Fina Elf remains keen on a farm-in deal with tiddler Anglo

Anglo Siberian, an oil explorer focused on Russia, has won extra time from French giant Total Fina Elf to iron out legal technicalities hampering the oil major’s farm-in to Anglo’s massive Vankor oil project. It shares jumped 22% to 56p.

Problems with the deal arose when companies associated Soyuzneftegas Invest, a private Russian concern, recently claimed the right to pre-empt the Total Fina Elf farm-in. Soyuzneftegas, claims to have purchased a 17% interest in a vehicle owned by Yeniseyneft, Anglo’s joint venture partner for the Vankor project. Soyuzneftegas claims that as a result it has become a 'participant' (shareholder) of that company.

Anglo is disputing Soyuzneftegas claims and demands. Court proceedings are now under way in the Krasnoyarsk Arbitration Court, East Siberia.

Legal actions launched by Soyuzneftegas have delayed completion of the Vankor sale and purchase agreement between Anglo Siberian and Total Fina Elf. Anglo Siberian said today it has requested and obtained from Total Fina a one year extension of the deadline for completion of the deal.

Robert Kennedy, chief executive of Anglo Siberian, said: ‘We welcome Total Fina’s commitment to joining the Vankor project and we are doing all that we can to complete their farm in as expeditiously as possible.'

In May 2002, Anglo Siberian and TotalFinaElf entered into a legally binding
sale and purchase agreement governing Anglo Siberian's 59% interest in a joint venture with Yeniseyneft. This joint venture company holds the Vankor licence.

The licence area is located in the Turukhansk District of Krasnoyarsk Kray in East Siberia. It covers the Vankor field and surrounding area, a total of 1,625 sq. km.

The Vankor field has officially estimated recoverable oil reserves of 906 million barrels. There is upside potential on the licence.

Under the Sale and Purchase Agreement, TotalFinaElf will acquire 52% of Anglo
Siberian's current 59% interest in Yeniseyneft LLC, leaving Anglo Siberian with
7%. TotalFinaElf will carry this 7% interest through appraisal and 5% of this
interest also through development.

TotalFinaElf will also make initial payments to Anglo Siberian of $7 million and further planned cash payments totalling approximately $20 million dependent on progress with the project. These payments are only repayable from future Vankor oil and gas production.