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CONOCOPHILLIPS is planning to sell off its 20% stake in the Russian oil giant Lukoil by the end of 2011, ending a longstanding partnership with Russia’s second-largest oil company.

The decision to offload Lukoil marks a U-turn for ConocoPhillips; the company’s ceo Jim Mulva had previously insisted that the investment was of strategic importance and would not be sold. Lukoil itself has agreed to buy back a 7.6% stake in August of this year. A further 4% could follow in September.  ConocoPhillips says it will sell the rest of the share on the open stock market by the end of 2011. The company hopes to raise around $10b this way.

ConocoPhillips says it will use the proceeds of the sale to pay down debt and buy back its own shares. The company was left with an over-stretched balance sheet after going on a largely debt-financed acquisition spree in 2008, which resulted in a record loss for the year of almost $32b.

The company also cut back on expenses elsewhere, pulling out of the Yanbu refinery in Saudi Arabia and the development of the Shah natural gas field in Abu Dhabi, and cancelling plans to upgrade its refinery in Wilhelmshaven, Germany.