bbj.hu: Yukos bidders would get stolen property, ex-CFO says

14 Feb 2007 bbj.hu: Chevron Corp. and other international oil producers that may be planning bids for assets of Russia’s OAO Yukos Oil Co. would be dealing in stolen property, the company’s former CFO said.

Yukos lost its largest production unit to state-owned OAO Rosneft after the government seized and sold it for $9.3 billion in December 2004 to pay back taxes. The remaining assets, valued at more than $22 billion, are expected to be sold starting this spring, with Chevron named as a possible bidder by Yukos’ bankruptcy manager. Much will depend on whether the European Court of Human Rights agrees to wider hearings on the Yukos bankruptcy later this year, former CFO Bruce Misamore said today in an interview in Houston. „If the European Court of Human Rights finds that Russia violated its own laws, which we believe will be the case, and that this led to this sham bankruptcy, this calls into question outside of Russia the legitimacy of everything,” Misamore said. „If it’s illegal, the purchasers of these assets will be purchasing stolen assets.” Misamore made his comments outside an energy conference sponsored by Cambridge Energy Research Associates. He ran Yukos’ finances from 2001 to 2005 and watched his company slip into bankruptcy last year following government claims for billions of dollars in back taxes.
Rosneft also may be interested in acquiring more of Yukos’ assets, with a focus on its refineries, said Peter O’Brien, vice president of finance and investments. Rosneft needs to expand its refining capabilities, and will be looking within Russia and in Asia and Eastern Europe, O’Brien told a panel at the conference. „Yukos has five refineries,” he said. „We’re definitely interested. We’ll see what valuations come out and what the process entails.” CEO Mikhail Khodorkovsky was handed an eight-year prison sentence in 2005 for fraud and tax evasion, and Misamore has lashed out at new charges filed on February 5. Misamore also is under a Russian criminal investigation. State-run OAO Gazprom held talks with US Ambassador William Burns on February 8 on the possibility of US companies purchasing Yukos assets. San Ramon, California-based Chevron, the second-largest US oil company, has expressed interest, a spokesman for bankruptcy manager Eduard Rebgun said on February 9.

Both Chevron and Irving, Texas-based Exxon Mobil Corp., the world’s largest oil company, were considering investments in Yukos in 2003, before Khodorkovsky’s arrest, Misamore said. The deal would have been a share-based transaction rather than an asset purchase, he said. Officials with both Exxon Mobil and Chevron were invited by Group Menatep, the largest Yukos shareholder, to consider an investment and visited data rooms provided by the Russian company, Misamore said. Now, President Vladimir Putin is building state-owned Russian companies to rival the likes of Exxon Mobil and Chevron. Russia’s government has criticized the country’s production-sharing agreements for benefiting foreign companies at the expense of the state, which shares in the profit after investors recoup costs.

In December, Gazprom took control of the Sakhalin-2 natural-gas project from Royal Dutch Shell Plc after Russian authorities threatened to shut it down on environmental concerns.

Russia’s Natural Resources Ministry in May urged Exxon Mobil, Total SA in Paris and London-based BP Plc to give Russian companies a bigger role in their ventures. The ministry is reviewing Total’s license to the Kharyaga oil field after saying oil and gas production was too low. (Bloomberg)

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