Yukos warns of further 'theft' of Yukos' assets

Yukos warns of further 'theft' of Yukos' assets

London  (Platts)--19Nov2004


Yukos Friday denounced the Russian government's planned sale of
Yuganskneftegaz as "clearly illegal," said the starting bid price bore no
resemblance to the unit's true value, and warned that selling off Yugansk at a
low price increased the likelihood of further "artificial" sales of Yukos
assets to meet "artificial" tax bills. 

"The sale is clearly illegal under Russian law, which states that non-core assets

are to be disposed of first in tax settlement cases," Yukos president and CEO

Steven Theede said in a written statement after the Russian government announced

it would auction off Yukos's main production unit Dec 19 at a starting price of

Roubles 246.75-bil ($8.65-bil). "Yuganskneftegas is the heart of Yukos, and its

sale will lead to the destruction of the most efficient Russian oil company, and

the one that has attracted the most western investment," Theede said. "The President,

the Russian administration, and the Russian government, by ignoring the
illegalities being perpetrated are in effect condoning the illegalities."

"The starting bid price bears no resemblance to the true value of
Yuganskneftegas, one of the world's premier oil production companies, and
amounts to theft of Yukos assets," Theede said, adding that Yukos had "fueled
the rebirth of the Russian oil industry," largely through Yuganskneftgas. "The
sale of Yuganskneftegas at a low price increases the probability that the
Russian government will then proceed to steal more of Yukos assets through
artificial sales to meet artificial tax bills," he said. The decision to sell
the unit marked a setback in Russia's "slow but steady path towards building
the foundations of a modern market economy," Theede said. "What we are
witnessing is, simply put, a government organized theft to settle a political
score."

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