Rosneft raider

Rosneft bought the remaining production and refining assets of bankrupt Yukos at auction for 1$6.42 billion, adding to recentacquisitions that have transformed Rosneft from a loose bundle of assets into the dominant player in Russia’s oil market. The only other bidder was a little known company called Versar.
Rosneft’s subsidiary Neft-Aktiv bought Yukos’ Samaraneftegaz production unit, with a capacity of about 200,000 barrels a day, and three refineries.
Rosneft has bought other Yukos production units in previous auctions; the purchase last week of one of the units leapfrogged Rosneft over Lukoil as the country’s largest oil producer. The state now has control of more than 40 percent of Russia’s oil production.
Yukos, once regarded as among Russia’s best-run and most transparent companies, was a favorite of foreign investors. But it was driven into bankruptcy by alleged back-tax bills ofUS$30 billion.
The bills were imposed in a series of legal actions that were patently aimed at dismantling the company to boost state control of the oil industry. The tax cases came in parallel with the conviction and imprisonment of former Yukos owner Mikhail Khodorkovsky on fraud and tax evasion charges.
Khodorkovsky had funded opposition political parties. Hence his punishment for daring to have political ambitions.

Yukos: Into oblivion

The bankrupt OAO Yukos vanished last week in a flurry of auctions that ended three years of politically driven legal action that left its former owner jailed and many of its assets snatched by its state-controlled rival.
Yukos, once regarded as one of Russia’s best-run and most transparent companies, was driven into bankruptcy by back tax bills of some $30 billion  while former owner Mikhail Khodorkovsky was jailed for eight years for fraud and tax evasion.
Khodorkovsky, once Russia’s richest man, had funded opposition political parties and was seen as having personal political ambitions that the Kremlin wanted to quash. A series of asset auctions have allowed the state-controlled oil company OAO Rosneft to transform itself from a loose bundle of holdings into an energy titan.
Yukos’ fate is at the core of the Kremlin’s emergence from passive observer in the 1990s to the controlling power it is today in both the economy and in politics.
Three lots went under the hammer last week, including Yukos’ last remaining production unit Samaraneftegaz, as well as the most visible symbols of its shattered empire – gas stations that dot Moscow and its towering headquarters.
Rosneft has undergone a revival as striking as Yukos’ decline. With Putin’s deputy chief of staff Igor Sechin in the chairman’s seat it has been steadily gaining power.
It became a major player overnight in December 2004 after acquiring Yukos’ 1-million-barrel-a-day Yuganskneftegaz production unit from an apparent shell company that had bought it in an auction.
In this year’s auctions, Rosneft snapped up a chunk of its own shares that had been owned by Yukos for 10 percent lower than their market value. Last week it bought Yukos’ 230,000-barrel-per-day Tomskneft unit and a handful of refineries. That let Rosneft leapfrog over OAO Lukoil to become Russia’s biggest oil producer and gave the state control of more than 40 percent of Russia’s oil production.
With Samaraneftegaz, Rosneft’s average daily production should rise from 1.9 million barrels to 2.1 million barrels – already level with Nigeria and Iraq. Rosneft could soon be pumping 2.3 million barrels per day.

LUKOIL shares: Alekperov controls 16.899%, Fedun 8.3%

Lukoil’s presidentVagit Alekperov directly and indirectly controls 16.899% of the company’s shares, a Lukoil announcement said today.

Leonid Fedun, the vice president, holds 8.3% of the stock – giving the two top managers a blocking stake of 25.199%.
Lukoil’s capitalization on the RTS (Russian Trading System) is around $72.893 billion.

This gives a market value of $12.32 bn. for Alekperov’s interest and $6.05 bln. for Fedun’s

Wall Street Journal exposes Lukoil insiders

“On the last day of August in 1997, a Russian oil tycoon named Vitaly Schmidt sat down to lunch at his Moscow apartment with his woman friend and his sister. The 48-year-old engineer downed a large helping of boiled-meat dumplings and a couple of shots of vodka. Three hours later, he was dead.
Mr. Schmidt was a multimillionaire with luxury residences in four countries. Much of his fortune came from a group of small offshore energy companies he oversaw on behalf of himself and a few fellow executives of a big Russian oil company, OAO Lukoil.”

• This compelling 3,000-word story, titled “At Lukoil, an Executive’s Death Exposes Network of Inside Deals,” by Glenn R. Simpson, was published by The Wall Sreet Journal on December 6th, 2006.
  
• Thanks to permission from The WSJ, you can read the article here in English and here in Russian.