Yukos 'faces increased tax bill'

MOSCOW (AP) -- Russian tax authorities have slapped oil giant Yukos and its main production unit with two new tax claims, raising the company's total bill to more than $17.6 billion (euro13.9 billion), according to the Interfax news agency.

The move likely brings the sale of the unit a step closer.

The Tax Ministry hit Yukos with a fresh bill for 2002 of $6.7 billion (euro5.2 billion), while its biggest subsidiary -- Yuganskneftegaz -- received new claims amounting to more than $3 billion (euro2.3 billion) for 2001 and 2002.

"This is easily higher than we had expected in our worst-case scenario," said Ron Smith, an oil and gas analyst at Renaissance Capital.

The market appeared to agree: Yukos' dollar shares on Moscow's RTS exchange plummeted 4.3 percent on the news Monday.

With 1 million barrels per day, the West Siberian-based Yuganskneftegaz is the largest -- and most profitable -- production subsidiary of Yukos.

The announcement Monday came on the same day that the investment bank J.P. Morgan Chase & Co. gave Yuganskneftegaz a valuation far above a government-cited starting price for a pending sale. The government wants to sell Yuganskneftegaz to recover the billions of dollars in taxes it says Yukos owes.

Yukos spokesman Alexander Shadrin confirmed receipt of the tax claims against Yuganskneftegaz, but said he was unaware that Yukos had been served an additional bill for 2002.

The Tax Ministry was not immediately available for comment. A representative for J.P. Morgan Chase said the company had no comment.

The tax case against Yukos and the parallel trial of its jailed former CEO, Mikhail Khodorkovsky, on fraud and tax evasion charges are widely seen as the Kremlin's revenge for Khodorkovsky's growing political clout.

Tax authorities had originally presented Yukos with a claim for $7.6 billion (euro5.9 billion) for 2000-2001 back taxes. A source in the company told The Associated Press on Monday that the company had so far paid down almost half that amount.

With its bank accounts frozen and a stop-order preventing it from selling noncore assets, Yukos is fighting to find the cash to pay its bills.

But with the new tax claims of $2.3 billion (euro2.8 billion) for 2001 and $1 billion (euro800 million) for 2002 against Yuganskneftegaz, and a new bill of $6.7 billion for 2002 for the parent company, Yukos must still pay some $14 billion (euro10.9 billion).

J.P. Morgan Chase valued Yuganskneftegaz at between $16 billion and $22 billion (euro12.5 billion to euro17.2 billion), the source in the company said Monday.

Yukos hired J.P. Morgan Chase to value Yuganskneftegaz after the Russian Justice Ministry seized on an estimate of $10.4 billion (euro8.2 billion) issued by investment bank Dresdner Kleinwort Wasserstein -- which the bank itself called "overly conservative."

That bank also gave a fair estimate at between $14.7 billion to $17.3 billion (euro11.5-euro13.6 billion), which was not cited by Justice Ministry officials.

Later reports that said the unit could be sold for a fraction of those estimates fueled fears of a fire sale of Yukos' assets, sending the company's share price tumbling and helping send world oil prices soaring.

Also Monday, a Moscow court agreed with prosecutors' request to extend Khodorkovsky's detention by three months until Feb. 14. Prosecutors argued that the Yukos founder might try to flee the country or influence witnesses.

(From CNN, 2.11.2004)