Yukos gets watchdog's backing, secures export route

Russian regulators voiced their support for oil major YUKOS's integrity yesterday as it faced losing its main production unit to pay a huge tax bill but secured access to vital export slots for its crude oil.

Bailiffs have said they will rip out and sell YUKOS's Yugansk subsidiary, which pumps around one million barrels per day (bpd), if YUKOS misses an end-of-month deadline to pay $US3.4 billion ($NZ5.32b) in back taxes for the year 2000.

That would strip Russia's biggest oil exporter of more than 60 per cent of its output. To add insult to injury, bailiffs have charged the firm $US230 million for their services, a bill that was confirmed to be legal by a court yesterday.

But Russia's financial markets regulator said officials recovering the tax debts should seek to minimise damage to shareholders and sell only non-core assets.

"The Federal Financial Markets Service considers that the sale of company assets should take place with a minimum of damage to its shareholders," the regulator said after talks with minority shareholders.

It also called for the "maximum possible preservation of the integrity of the company's production operations and their ability to function."

The market regulator holds little weight, but investors hoped the comments signalled an upturn in YUKOS's fortunes.

"They didn't promise us anything, but their position gives us hope some actions will follow," Ivan Mazalov, a director at Prosperity Capital Management, said.

"However cautiously they might approach this matter, it's still positive compared to the behaviour of the bailiffs."

Its bank accounts frozen, YUKOS has had to fall back on export revenues for survival, and September schedules for cargo shipments through major ports showed the firm would be able to count on that income next month as usual.

September's loading programme for ports served by pipeline, seen by Reuters on Wednesday, allocates the company roughly the same export volumes next month as in August.

That means tankers will continue to ship YUKOS oil to markets where tight supply has kept prices near record highs.

YUKOS has been allotted 520,000 tonnes of cargoes through the Baltic port of Primorsk, 300,000 tonnes through its Butinge terminal in Lithuania, and 140,000 tonnes through Russia's main Black Sea port of Novorossiisk.

Markets have worried that an inability to access cash could mean the company would fail to pay transport fees to ship its crude through the pipeline network run by state pipeline monopoly Transneft.

YUKOS ships around 600,000 bpd through Transneft, and its presence in shipment schedules is vital for its survival.

YUKOS is battling claims for $US7b in back taxes and fines for 2000 and 2001 in a stand-off that could sink the company and has helped stoke fears of disruption to its output, which exceeds that of Libya.

The company's shares closed at 113.20 roubles on Moscow's MICEX exchange, down 75 per cent on their value in April as a tide of tax claims has pushed one of Russia's most profitable companies ever closer to collapse.

Those cases are widely believed to be linked with the prosecution of its main shareholder and former chief executive, Mikhail Khodorkovsky, whose political ambitions analysts believe were too much for a Kremlin ill at ease with serious opposition.

Khodorkovsky is on trial for fraud and tax evasion and faces up to 10 years in a labour camp if convicted.

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