Official Fears YUKOS May Stop Oil Exports

Russia's Federal Energy Agency said on Wednesday it will ask court bailiffs to unblock YUKOS oil company's frozen accounts, worried that its oil exports could be cut if it cannot access its cash.

"It is not possible for a big company to exist without financing for its operations," the head of the agency, Sergei Oganesyan, told reporters.

The comments by Oganesyan, Russia's number two oil official, mark the first public sign of dispute within the government over the handling of YUKOS, which has lost around two-thirds of its value since April as investors became increasingly unsure of the firm's fate.

"We are raising the issue of unblocking YUKOS' accounts in order to make minimal payments. Our aim is to prevent the stoppage of wells, since YUKOS is now 20 percent of our output and other companies could not pick up the slack," he said.

"Up to 35 million tonnes a year (700,000 barrels per day), including supplies to China, could in theory not reach the world markets."

He did not specify how he made his calculations. YUKOS produces 1.7 million bpd and exports more than one million bpd.

Fears that YUKOS' oil exports could be disrupted after bailiffs seized its bank accounts to guarantee payment of a $3.4 billion back tax bill have helped push oil prices up to record high levels in recent days.

Traders are principally concerned that YUKOS rail shipments of around 300,000 bpd could cease. Russian pipeline monopoly Transneft has said other firms could compensate for lost YUKOS volumes if the oil giant was unable to pay its shipping fees.

YUKOS says it has paid fees to keep Transneft shipping its oil until the end of August. The state railway company said on Monday that YUKOS had paid transport fees in time for a Tuesday deadline and it expected to keep YUKOS oil moving toward ports.

But Oganesyan added that the main problem were not payments to Transneft or the Railways but to the State Customs Committee.

"Up until yesterday the State Customs Committee had YUKOS' money on its accounts. Today was a deadline (for new payments) but there is no money," he said.

Analysts say that even if the government is determined to take over YUKOS assets to cover tax debts, it will want to keep oil flowing to avoid blame for high prices on world markets.

YUKOS' troubles are seen by many as orchestrated by the Kremlin to punish its main owner, Mikhail Khodorkovsky, for his political ambitions. The jailed billionaire is now on trial on charges of fraud and tax evasion.



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