- Title: RUSSIA: MYSTERY FIRM BUYS RUSSIAN OIL COMPANY YUKOS' S MAIN PRODUCTION UNIT
- Date: 20th December 2004
- Summary: (W4) MOSCOW, RUSSIA (DECEMBER 20, 2004) (REUTERS) 1. WIDE OF MOSCOW INTERBANK CURRENCY (MICEX) EXCHANGE TRADING HALL 0.05 2. WIDE OF BROKERS TALKING 0.11 3. CLOSE OF COMPUTER SCREEN 0.17 4. WIDE OF CLOCK ON WALL, SIGN MICEX 0.22 5. WIDE OF EXTERIOR OF YUKOS HEADQUARTERS 0.28 6. WIDE OF PEOPLE COMING OUT OF BUILDING 0.36 7. CLOSE OF SIGN "YUKOS" 0.40 8. WIDE OF EXTERIOR OF YUKOS BUILDING, TRAFFIC SIGN "STOP" IN FRONT OF IT 0.44 9. WIDE OF INTERIOR OF TROIKA-DIALOG INVESTMENT BANK TRADING ROOM 0.53 10. SCU BROKER ON THE PHONE 0.58 11. SMV BROKERS LOOKING AT COMPUTER SCREENS 1.04 12. WIDE OF ELECTRONIC SCREEN WITH PRICES 1.09 13. WIDE OF JAMES FENKNER, TROIKA-DIALOG DIRECTOR OF RESEARCH TALKING TO BROKERS 1.16 14. CLOSE OF COMPUTER MOUSE AND TELEPHONE ON BROKER'S DESK 1.21 15. SCU (SOUNDBITE) (English) JAMES FENKNER, TROIKA-DIALOG DIRECTOR OF RESEARCH, SAYING: "I think the auction wasn't a surprise, but the fact that a company which no one in the market has heard of until Friday won a major Russian asset is a little bit of a surprise." 1.35 16. WIDE OF COMPUTER MONITORS 1.41 17. SCU (SOUNDBITE) (English) FENKNER, SAYING: "I think that over a relatively short period of time it should become clear who is behind this group and in fact if this group is actually going to acquire the assets of Yuhanskneftegaz. The general view within the market is that this group was created as a result of the tax bankruptcy claims out of the U.S. in an attempt on one hand to hold an auction as scheduled, because it will look bad for the Russian government to postpone an auction and the other hand to allow potentially the beneficiary of Gazprom or Surgutneftegaz to eventually win." 2.20 18. WIDE OF BROKERS IN FRONT OF COMPUTERS 2.27 19. WIDE OF ELECTRONIC SCREEN 2.35 (W4) GRAPHICS (DECEMBER 20, 2004) (REUTERS) 20. WIDE OF YUKOS SHARE PRICE FALLING 2.41 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 4th January 2005 12:00
- Location: MOSCOW, RUSSIA
- Country: Russia
- Reuters ID: LVA55MLS7L4QU04570N1WFUISWQF
- Story Text: Markets watch next move in YUKOS saga after mystery
firm buys Russian oil giant's main production unit.
Russia left YUKOS and its investors guessing as to
its next move on Monday (December 20) after selling its
main oil production unit to Baikal Finance Group, a mystery
firm registered at a grocery in provincial Russia.
"I think the auction wasn't a surprise, but the fact
that a company which no one in the market has heard of
until Friday won a major Russian asset is a little bit of a
surprise," said Torika Dialog's James Fenkner in Moscow.
"...Over a relatively short time it should become clear
who is behind this group and in fact if this group is
actually going to acquire the assets of Yuhanskneftegaz.
The general view within the market is that this group was
created as a result of the tax bankruptcy claims out of the
U.S. in an attempt on one hand to hold an auction as
scheduled, because it will look bad for the Russian
government to postpone an auction and the other hand to
allow potentially the beneficiary of Gazprom or
Surgutneftegaz to eventually win," added Fenkner on Monday.
Some analysts speculated that Baikal Finance's winning
$9.4 billion bid at the Sunday auction could be a stalling
tactic by the Russian government to circumvent a temporary
U.S. court ruling which barred prospective bidders and
their foreign bankers from bidding, pending further
proceedings in YUKOS's application for U.S. Chapter 11
Russian gas monopoly Gazprom, named in the U.S. court
order and widely seen as favourite to buy Yugansk, ended up
not bidding at the auction.
Reporters, watching the auction on closed-circuit
television, initially believed Gazprom's oil unit had
lodged a bid at the minimum price of $8.9 billion for
Yuganskneftegaz but it was later confirmed no such offer
had been made.
A win at the auction would have put Gazprom, the
world's largest gas producer, in direct violation of the
U.S. court order and expose it to contempt of court
proceedings which could involve foreign asset seizures.
The U.S. order had already sunk plans for the
heavily-indebted Gazprom to get funding to buy Yugansk from
a consortium of foreign banks including Deutsche Bank and
Gazprom has denied having any links to Baikal, named
after but the market still believes the state-controlled
gas giant or other state interests had a hand in the
YUKOS is widely seen by analysts as the victim of a
Kremlin campaign to crush its politically ambitious owner,
Mikhail Khodorkovsky, and seize control of strategic
sectors of the economy sold off in the chaotic
privatisations of the 1990s.
Khodorkovsky is now on trial for fraud and tax evasion
and faces 10 years in jail if convicted.
Baikal Finance Group, named after the deepest fresh
water lake in the world, in eastern Siberia, was not one of
three originally registered bidders at the auction and was
registered in Tver, a city some 200 km (125 miles) north of
Moscow, only about a week ago.
Analysts believe it was a hastily assembled vehicle
allowing Russian state interests to get round the U.S.
Russian news agency Itar-Tass said one of its reporters
had checked the address given by Baikal in Tver and had
found a building housing a mobile phone shop and a food
The auction was ordered to raise funds to help pay
YUKOS's $27.5 billion back-tax bill, the result of a
relentless assault by the authorities which analysts say is
aimed at breaking up the company. Of the total tax bill
Yugansk itself owed $5 billion.
The auction leaves YUKOS stripped of its main asset,
which pumps about one million barrels of oil a day, more
than OPEC member Qatar. The company has already considered
filing for liquidation to protect its remaining assets from
Worries are compounded by confusion surrounding YUKOS's
oil exports in January as traders struggle to come to grips
with how the mystery buyer of Yugansk might pick up the
controls on such a vast enterprise.
Menatep, a group through which Khodorkovsky and his
associates control YUKOS, has promised years of litigation
with its American lawyers threatening to seek billions of
dollars in damages in foreign courts.
YUKOS's troubles have already helped push oil prices to
peak levels over the past few months and concerns over
supplies from the world's second-biggest oil exporter could
grow after Menatep's lawyers threatened on Sunday to
initiate further widespread legal action.
Gazprom, the world's largest natural gas firm is at the
centre of Russian plans to create a huge state energy
holding company which also embraces oil production, but the
fact it supplies a quarter of Europe's gas also makes it
vulnerable to international court rulings.
The Yugansk sale is also disputed by YUKOS minority
shareholders who control 25 percent of the company and who
have threatened legal action, alleging illegal
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