ConocoPhillips acquired a 7.59% stake in LUKoil for $1.988 billion in September. The company said it wanted to increase its stake to 20%.
Last week, LUKoil and ConocoPhillips announced a joint venture, Naryanmarneftegaz, to develop the resource-rich Timano-Pechora region in northern European Russia.
ConocoPhillips will pay about $500 million for a 30% stake in the joint venture, which the two companies will run jointly.
Naryanmarneftegaz is expected to produce about 200,000 barrels of oil per day and deliver it to international markets on tankers from LUKoil's terminal on the Barents Sea. In 2007, LUKoil plans to increase the terminal's capacity to 240,000 barrels per day, and ConocoPhillips will help to draft and finance the terminal's expansion.
The joint venture was established under a strategic partnership agreement inked by ConocoPhillips and LUKoil on September 29, 2004.