Company Recalls Equipment From Yukos

Cash-squeezed Yukos has lost a key partner at some of its most lucrative fields, as oilfield services company Schlumberger Ltd. confirmed Monday it was recalling some of its personnel and equipment from a key production unit for the embattled Russian oil giant.

Those resources, which have been stationed at fields belonging to Yukos' Yuganskneftegaz unit, are being transferred to other clients, said Gleb Ovsyannikov, director of media relations at Schlumberger's Russian division.

"If the financial situation remains the same more equipment could be recalled," he said.

Since the summer, Russia's No. 1 oil producer has been fending off government demands for $7 billion in back tax claims for 2000-2001. The company says the back tax bill would bankrupt it and the legal onslaught against it and its jailed former CEO Mikhail Khodorkovsky is widely seen as punishment for the tycoon's political ambitions.

Fears of production interruptions at Yukos, which pumps 2 percent of the world's oil, have helped send world oil prices soaring to record highs in recent months.

Yuganskneftegaz - which producers 60 percent of Yukos' oil - is expected to be sold imminently to cover Yukos' outstanding tax bill, while a stop order prevents the parent company from selling noncore assets to pay the bill. Yukos chief financial officer Bruce Misamore said last week the company was behind in making current payments to contractors and tax authorities since virtually all of its $1 billion in monthly revenues were being used to pay down the back taxes.

"We live from day to day, from week to week," Misamore told The Associated Press.

Also Monday, a handful of demonstrators protested outside the Moscow court where Khodorkovsky and business partner Platon Lebedev are being tried on fraud and tax evasion charges, marking the one-year anniversary of the businessman's arrest.

While the Kremlin has cast the case against Khodorkovsky and Yukos as a just crackdown on shady bookkeeping and dubious tax-optimization schemes, observers say Khodorkovsky drew the Kremlin's ire by moving aggressively into politics. As well as aggressively lobbying for a privately owned export oil pipeline Khodorkovsky lavishly funded opposition parties in the run-up to parliamentary elections last year.

Speaking outside the court building, Khodorkovsky's father said that a year in prison had not broken his son. 131

(From Forbes, 25.10.2004)