Yukos falls on new tax demand

Shares in Russian major oil company Yukos tumbled 12 percent Friday after it said a court order freezing its bank accounts over a $3.4 billion tax claim for 2000 posed a direct threat to its operations.

The slide brought losses in Yukos shares to more than 20 percent in two days, after Russian news agencies reported that tax authorities had hit Russia's leading oil producer with a second tax demand for 2001, also for $3.4 billion.

Yukos must pay the first fine by early next week but says it lacks the money, raising the prospect of a fire sale of its assets, which could turn what was once Russia's largest listed company into an empty shell.

"The freezing of Yukos' accounts could lead to the halting of its operations and its ability to continue as a going concern," said Steven Dashevsky, oil analyst at Aton brokerage.

Yukos shares slumped 12 percent on the MICEX exchange to 178 rubles, close to the two-year lows set in mid-June when former Chief Executive Mikhail Khodorkovsky went on trial for tax evasion and fraud.

Prices later recovered about half their losses.

Yukos' dollar-denominated shares opened down 17 percent.

"Even after the close yesterday, foreign traders were selling Yukos massively," said Konstantin Shapsharov, a dealer at Alfa Bank.

A court, meanwhile, turned down an appeal by Yukos against a freeze on its assets, meaning that bailiffs who Thursday gave the company five days to pay its 2000 tax debt will control the company's likely break-up.

Yukos says it has just more than $1 billion in cash, and analysts reckon the first asset to go on the block will be Yukos' 35-percent stake in Sibneft, acquired in a failed merger last year and worth about $4.7 billion.

Concerns grew on the oil market that, with the state pushing for rapid payment while Yukos' hands are tied, the affair could soon have an impact on Russian oil exports -- the world's second largest after Saudi Arabia.

Russia's pipeline monopoly Transneft said it would accept crude from Yukos as long as it paid pipeline fees, but added that Russia's total oil exports would not suffer even if Transneft stopped accepting oil from Yukos.

"We can easily replace these volumes with volumes from other companies," Transneft's vice president, Sergei Grigoryev, told Reuters. Energy ministry data showed Friday that Yukos pumped 1.72 million barrels per day of oil in June, unchanged from May, meaning that it produces nearly one in five of Russia's barrels.

"Yesterday's rally on oil and gas will continue as institutional buyers look at the Russian situation, see a tightening of supply, and buy into oil aggressively," said one New York-based energy broker.

Crude oil futures on New York's NYMEX exchange rallied 4.6 percent Thursday before easing on profit-taking Friday.

The Kommersant business daily quoted sources close to Yukos saying talks were under way between the company and the government, which the newspaper said was taking steps to avert Yukos' bankruptcy.

The sources also said the government had met informally with Societe Generale, which arranged a $1.6 billion export-backed loan to Yukos funded by Menatep -- Khodorkovsky's holding company, which controls Yukos.

Yukos has been put on notice of potential default over that loan, and on a $1 billion syndicated facility put together by Citigroup.

HERE