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October 11, 2001

Russian oil company takes stake in Kværner
Shares in Kværner closed some 25% up on the Oslo stock exchange at NOK 13 following an announcement made in accordance with the Norwegian Securities Trading Act that Yukos Finance B.V., a company incorporated in the Netherlands, had acquired 586,487 shares in Kvaerner ASA.

Yukos Finance B.V., a subsidiary of the Russian oil company Yukos Oil Company, holds (together with close associates) at present approximately 10.0055% of the shares and the votes in Kvaerner ASA, said the statement.

A statement from Yukos noted that the company "has substantial contractual relationship with Kvaerner and has an interest in preserving the level of service it has been receiving from Kvaerner during the period of uncertainty that the company is experiencing.

“We have been very impressed by the high level of technical expertise at Kvaerner and we look forward to exploring how we could further expand the relationship between our firms in the context of Yukos’s upstream projects,” said Yuri Beilin, President of Yukos Exploration and Production. Yukos said that the management of Kvaerner ASA had indicated that it supported transaction and views it as a positive development.

Kvaerner's management is likely to welcome all the help it can get. Earlier in the day, Kvaerner's largest share holder, Kjell Inge Rokke's Aker Maritime, said that it had decided not to participate in an underwriting syndicate for the share issue announced by Kværner as part of its refinancing efforts. Aker said it would "take a view on participating in the issue after assessing whether the board's proposal involves a robust and permanent overall solution for the group."

Earlier this week, Kvaerner disclosed that its lenders had appointed a task force to work closely with the Kvaerner Board and management on all aspects of the refinancing of the group. Kvaerner further disclosed that its third quarter results would be lower than expected and said: "With this development it can not be excluded that the group will be in breach of its financial covenants at the end of the third quarter. In light of this possibility the group has entered into a dialogue with the group’s lenders to agree a suspension of the financial covenants should such breach occur."

Separately, the board of directors of Kvaerner agreed to a request from Aker Maritime that an extraordinary general meeting be called to consider a motion concerning an investigation of the company. It set the date for that meeting as November 2. It said it would support the proposal for an investigation but said the timing was "very unfortunate."

"The company’s most important priority at present is to establish long-term bank financing and achieve an expansion in its equity," said the statement.

"An inquiry at this time would complicate that process. The board will accordingly propose to the general meeting that the investigation begins in January 2002.

"At the same time, the board believes an inquiry should not be confined to the period after July 1, 1998. In order to understand the company’s position and both present and former dispositions, the board will accordingly propose to the general meeting that the investigation should start from July 1, 1995."