Russia's Tyumen Oil Company, owner of Ukraine's largest oil refinery and a growing network of gasoline filling stations, is seeking a Western investor in the hope of keeping its expanding business network afloat.

If such a deal does work out, it would signal the first major Western investment (admittedly indirect) in Ukraine's petroleum industry - an industry presently dominated by Russian oil firms. Tyumen Oil, which also does business as TNK, bought Ukraine's Lysychansk Oil Refinery (LiNOS) in July 2000. LiNOS has since increased its production by 70 percent to more than 4.1 million tons per year, an amount equal to 35 percent of the country's entire refining capacity. Depressed worldwide oil prices and expenses incurred during expansion have placed TNK in a cash-flow crisis the company believes would best be solved by the entrance of a Western partner. While the identity of the Western firm or the size of the stake in TNK being offered is not immediately clear, what is known is that the buyer would obtain access to a healthy slice of the petroleum markets in Russia and Ukraine. Publicly, TNK officials are downplaying the significance of any potential deal. TNK would neither confirm nor deny reports that the company is already holding talks with potential investors. It did, however, identify BP (formerly British Petroleum) as one potential investor. TNK controls more than 8.2 billion barrels of proven crude oil reserves. It refines more than 500,000 barrels per day and ranks second among Russian oil companies by reserves and fourth by production. TNK either owns or franchises close to 1,000 filling stations.