BUSINESS WEEK (EU): Italian oil giant Eni tipped as only Western Yukos bid: “ITALIAN oil giant Eni this weekend emerged as the only western oil company tipped as a possible bidder for the main asset of doomed Russian oil firm Yukos.”: “BP and Shell have ruled out bidding, along with other leading US oil companies” (ShellNews.net) 21 Nov 04
By Richard Orange
ITALIAN oil giant Eni this weekend emerged as the only western oil company tipped as a possible bidder for the main asset of doomed Russian oil firm Yukos.
Energy analysts have noted that statements from ENI, and the Italian and Russian governments stopped short of an outright denial of interest.
BP and Shell have ruled out bidding, along with other leading US oil companies. The Russian Federal Property Fund on Friday brought the long-running Yukos saga to a close, setting 19 December as a date for an auction of its core production unit Yuganskneftegaz and setting the starting price at $8.65bn (£4.7bn, €6.8bnJ, around half what most consider the fair value of the company The group produces over 1m barrels of oil a day
Mattias Westman at Prosperity Capital said: "There's only one western oil company that's ambiguous and that's Eni. My guess is that a gang of three of Eni, Gazprom and Surgut-neftegas will be in the bidding."
Speculation has been growing that Eni might take part in the sale since a visit by the country's industry minister Antonio Marzano to Moscow last week coincided with the director of the Italian industry ministry Sergio Garribba telling local press that Eni was interested in Yukos' assets. Garribba said: "There's Italian interest to enter the Russian market. We are interested in Yukos assets. I think that one of the candidates is Eni."
Eni's involvement, perhaps in partnership with Gazprom, would help give the auction international legitimacy. It would bring Gazprom to the necessary level of funds and remove the risk that Gazprom, if it won bidding, would preside over a decline in oil production. Westman said: "Gazprom hasn't got money or any competence as an oil company"
Foreign firms are allowed to bid, but few are expected to enter the auction given the tax liabilities over the company and the risk of litigation from Yukos' core shareholders.