The Guardian (UK): Yukos under the hammer at $8.6bn: Russia sets up cut-price auction of oil group's main unit and raises tax bill to $30bn: “Yukos' core shareholder Group Menatep has threatened any potential buyer with "a lifetime of litigation". Last night a BP spokesman ruled out bidding, while Royal Dutch Shell refused to comment.” (ShellNews.net) 20 Nov 04
Saturday November 20, 2004
Russia pressed ahead yesterday with controversial plans to break up the country's biggest oil company Yukos, setting a date of December 19 for an auction of its main production unit at a bargain basement starting price of $8.65bn (£4.88bn).
The government also hit Yukos with a new tax demand of $6bn for 2003 to add to the existing bill of $24.5bn.
Yukos chief executive Steven Theede immediately branded the proposed sale a "government-organised theft to settle a political score".
The announcement could lead to new uncertainty on world oil markets as the Russian government's 16-month legal onslaught against Yukos, which produces more oil than Libya, moves into a final decisive phase. The move ended months of speculation over whether the government would go ahead with threats to sell off the Siberian unit, Yuganskneftegaz, as payment for back tax charges.
The sale looks likely to open the way for greater state dominance over the oil sector if, as expected, state-controlled energy group Gazprom makes a winning bid. However, it could force Yukos to retaliate by filing for bankruptcy, a situation President Vladimir Putin has said he wants to avoid. The news sent Yukos shares tumbling 22% to $2.29.
Several minority sharehold ers said they were considering whether to sue over the sale and even Mr Putin's economic adviser Andrei Illarionov decried the move. Dresdner Kleinwort Wasserstein has issued a report to the Russian justice ministry putting Yugansk's value at up to $17.3bn.
Analysts said they doubted any foreign oil company would bid for the unit because of the potential legal risks involved. Yukos' core shareholder Group Menatep has threatened any potential buyer with "a lifetime of litigation". Last night a BP spokesman ruled out bidding, while Royal Dutch Shell refused to comment.
Yukos' management and its core shareholder group, headed by jailed billionaire Mikhail Khodorkovsky, have previously pledged to do their utmost to maintain output at the oil major. But yesterday Mr Khodorkovsky appeared to issue a veiled warning that he could no longer vouch for the stability of supplies.
"These actions are putting all the responsibility for the operations of very dangerous Yukos production facilities, for supplies to regions, for social benefits to workers on the government," he said in a statement issued via his lawyers. "Mikhail Khodorkovsky hopes that this responsibility is exactly what [the government is] striving for."