Daily Telegraph: Prime Yukos oil field in line for Russian gas bid: “Russia's massive gas monopoly Gazprom will bid for the prime Siberian oil field of troubled Yukos when a government-ordered fire sale takes place later this month…”: “Other potential bidders are said to include German power supplier E.On, China's largest oil producer the China National Petroleum Corporation and Anglo-Dutch company Royal Dutch/Shell.” (ShellNews.net) 1 Dec 04
By Nick Holdsworth in Moscow (Filed: 01/12/2004)
Russia's massive gas monopoly Gazprom will bid for the prime Siberian oil field of troubled Yukos when a government-ordered fire sale takes place later this month, the company said yesterday.
Sergei Bogdanchikov, head of Gazprom's newly established oil subsidiary Gazpromneft, said that acquiring the Yugansk oil field - which goes on the block at a knock-down starting price of $8.6 billion (£4.5 billion) on December 19 to pay off back taxes totalling $24 billion – was the "most profitable strategy" for the nascent division.
End of the road? Yukos could end up in state hands
The bid is likely to be challenged by Yukos, which claims the starting price is less than half the market valuation.
Tim Osborne, managing director of Menatap, the holding company that owns most of Yukos, yesterday warned would-be buyers that an "illegal" auction would face consequences. "Anyone who buys Yuganskneftgas at an illegal auction takes upon himself all risks, both legal and financial, associated with the sale," Mr Osborne said.
The Gazprom announcement makes the company the first to go public with its intention to buy the Yugansk field and confirmed market rumours that the crown jewels of Yukos could end up effectively in state hands.
The tax case against Yukos and the imprisonment and trial of its former chief executive, Mikhail Khodorkovsky, are seen as an attempt to wrest control of the company from its owners and take away the growing clout the Kremlin feared Mr Khodorkovsky would use against it. Throughout the assault on the company and its owners, which began in July last year, President Vladimir Putin has maintained that the case is a righteous probe into shady business practices and tax optimisation schemes. Mr Bogdanchikov said the new Gazprom division, which will deal in oil and condensed gas products and is expected to absorb state oil company Rosneft as part of a rapid growth plan, was also considering buying assets in key oil producers Sibneft and state-connected Surgutneftegas.
A successful bid for the Yugansk field, which pumps around one million barrels of oil a day – some 60pc of Yukos's total output – would make mother company Gazprom the world's third biggest energy company.
Gazpromneft oil production could reach 90m tonnes next year if it bought Yugansk and could be pumping as much as 125m tonnes by 2010, Mr Bogdanchikov said. Other potential bidders are said to include German power supplier E.On, China's largest oil producer the China National Petroleum Corporation and Anglo-Dutch company Royal Dutch/Shell.