US$3b tax claims looming over Yukos unit

RUSSIAN authorities are considering launching a tax demand of up to US$3 billion against a Yukos subsidiary, in a fresh escalation of pressure on the embattled oil group, the Financial Times reported yesterday.

The newspaper, quoting an unnamed government official, said that Russia's tax ministry had prepared the additional tax claims directly against Yuganskneftegaz, Yukos' main oil production unit in west Siberia.

'The move would help reduce significantly the market value of Yuganskneftegaz, easing the way for efforts to strip out the group's core oil producer and sell it at a price affordable to a Russian company,' the paper said.

Neither Russian government officials nor Yukos officials were immediately available for comment.

Yukos, Russia's biggest oil exporter, has been close to collapse for months after authorities hit it with tax claims running to US$7 billion and bailiffs froze its bank accounts and assets. It needs to pay US$3.4 billion in back taxes for 2000 before the end of August.

Its troubles are part of a broader judicial campaign, seen by many analysts as orchestrated by the Kremlin to punish its politically ambitious founder Mikhail Khodorkovsky, currently on trial on charges of fraud and tax evasion.

Earlier this month, Russia hired investment bank Dresdner Kleinwort Wasserstein to value Yuganskneftegaz. Yukos has said Yuganskneftegaz is worth over US$30 billion, based on its reserves, but analysts have said that the unit could fetch anything from US$12 billion to US$20 billion if sold at an open auction.

State-controlled Gazprom and Rosneft have both been tipped as likely candidates to buy Yuganskneftegaz, while Surgutneftegaz, an oil group seen as loyal to the state, is also believed to be interested, the Financial Times said.

'Claims such as these could potentially be made against other production units which would only add to the already negative sentiment. It would bring the total outstanding claims against Yukos to US$10 billion,' said UFG brokerage. 'The aim of this new tax demand appears to be to reduce the value of Yugansk to enable some of the state companies to acquire it,' the brokerage said in a note.

Yukos fell 11.3 per cent on the Micex bourse by 0911 GMT after the report.

Many analysts say a fair price for Yugansk would be at least US$15 billion and only a Western major or a Chinese firm could afford buying it, while Moscow was very reluctant to let it end up in foreign hands.

'We reiterate our belief that no foreign company will be allowed to bid for Yugansk,' said Raiffeisenbank, which values Yugansk at US$16 billion.

HERE