Yukos Gets More Time to Resolve Status of Drilling Licenses

The Russian government gave Yukos a three-month reprieve on some of its Siberian oil drilling licenses, easing investor fears that the company's value might be drastically reduced without them.
The Natural Resource Ministry's license commission notified Yukos and its Siberian subsidiary Yuganskneftegas on Friday that they had three more months to iron out suspected violations on 21 licenses, the Interfax state-controlled news agency reported. The government had threatened to review the licenses.
Russian oil companies derive their value mainly from their licenses - essentially permission to drill for oil and gas. Investors were concerned that if Yuganskneftegas lost those licenses, the value of Yukos would plummet. Worse, investors feared that the company might be stripped entirely of its licenses or that they might be sold to state-friendly oil companies.
Yuganskneftegas is Yukos's main oil-producing subsidiary, churning out about 60 percent of Yukos's 1.7 million barrels a day. Yukos's yearlong tangle with the Kremlin has contributed to record high oil prices; the company supplies 2 percent of the world's crude oil.
On Thursday, Viktor Gerashchenko, the chairman of Yukos, confirmed a preliminary appraisal value for Yuganskneftegas of $15.7 billion to $17.4 billion. The Russian government has said it will sell off the subsidiary as payment for Yukos's large back tax bills, and has hired Dresdner Kleinwort Wasserstein to set a fair market value on the unit.
Commenting on the price, Mr. Geraschenko said the government might have put itself in a bind.
"There is not a single Russian company that could afford to buy Yuganskneftegas for even $10 billion and the government does not want to give it up to a Western company," Mr. Gerashchenko told a United States-Russia investment conference in Washington, according to news agencies.
A Yukos spokesman said this week that Dresdner Kleinwort Wasserstein had been asked by the government to do some new assessments: how much Yuganskneftegas might fetch if it were sold in pieces of 25 percent, 50 percent and 75 percent. The government would probably be able to find buyers for portions of the company.
Yukos alone owed $7.5 billion in back taxes, and has already paid $3 billion of that, Mr. Gerashchenko said. This week an additional $950 million in back taxes was assessed against Yuganskneftegas.
Yukos is caught in a circle of nonpayments. Its bank accounts are frozen, it has repeatedly warned it cannot pay bills or current taxes, and money owed to suppliers and customers has mounted to a figure approaching $1 billion, according to the Yukos official. The company is now engaged in barter transactions with the Russian government's oil pipeline monopoly Transneft, trading crude oil in exchange for export shipments.
The troubles at Yukos are widely seen as part of a Kremlin-backed campaign to punish its founder and controlling shareholder, Mikhail B. Khodorkovsky, for his political challenge to President Vladimir V. Putin and for his advocacy of private oil pipelines.
Mr. Khodorkovsky is on trial for fraud, embezzlement and tax evasion. His trial resumes Monday.

By ERIN E. ARVEDLUND
(from The New-York Times)