Posted on 01/04/2005 1:33:00 PM PST by Grzegorz 246
President Vladimir Putin has defended the Russian state’s takeover of the main asset of the Yukos oil giant, saying the first post-Soviet renationalization was to ensure the national interests.
“Today the state, using absolutely legal market mechanisms, is protecting its interests. I consider that absolutely normal”, Putin told an annual press conference in the Kremlin, referring to the acquisition by state petroleum company Rosneft of Yukos’ core oil-pumping subsidiary, Yuganskneftegaz.
On December 23, Rosneft became the new owner of Yuganskneftegaz after buying the mystery firm that had won a secretive auction for the massive Siberian concern, owner of 17 percent of Russia’s vast oil reserves.
Rosneft, which is already merging with state-run gas monopoly Gazprom to create a national oil and gas corporation, issued a surprise announcement saying it had acquired 100 percent of the shares of previously unknown Baikalfinansgroup.
The deal cements Kremlin control of the strategic energy sector after almost 18 months of attacks on Yukos and its imprisoned billionaire founder, seen as a long-standing goal of Putin, a former KGB career officer. The combined entity formed by Gazprom, Rosneft and Yuganskneftegaz will account for a fifth of Russian oil output and nearly all its gas production, making it the biggest global energy group.
Putin justified the takeover by criticizing the murky 1990s privatizations that handed control of the crown jewels of the Russian economy to a handful of well-connected businessmen, including Khodorkovsky.
“Everyone knows exactly how the privatizations took place in the early 1990s, and how they used various tricks, including those which violated even the existing laws”, he said. “Many market players won the rights to multi-billion-dollar state assets”.
In an auction on December 19 cloaked in secrecy and which provoked sharp criticism in Washington and other Western capitals, the Russian authorities broke up Yukos, the country’s largest oil producer, selling its main subsidiary Yuganskneftegaz.
The Baikalfinansgroup, which won the rights to Yukos’ crown jewel after offering 9.35 billion dollars (seven billion euros), had been seen as a front company for Kremlin interests.
A spokesman for Rosneft, the last major oil company owned by the Russian state and the seventh biggest group in the sector, said the management planned to transform the firm into a “balanced national energy corporation”. The world’s largest gas producer, Gazprom is due early this year to complete its merger with Rosneft.
Yukos, however, immediately threatened to sue Rosneft and any other ultimate owner of Yuganskneftegaz. Gazprom had been widely expected to buy the Yukos core asset at the auction. But the company pulled out at the last minute because of the threat of international legal action following an injunction issued against it by a court in the US city of Houston, ordering the suspension of sales of Yukos assets.
Putin described that ruling as “inadmissible” for failing to respect Russian juridiction. But an analyst at Troika Dialogue brokerage, Valery Nesterov, said the contorted sale was an effort to escape the long arm of US justice.
“At the last moment, Gazprom realized the gravity of the situation. As the government is one thing, it is sovereign and can do what it wants, but international business needs to observe other countries’ laws”, he said.
Attorneys for Yukos told a US bankruptcy judge that they would seek 20 billion dollars in damages from the company or companies that bought Yuganskneftegaz. Yukos’ main owner, Mikhail Khodorkovsky, behind bars since October 2003, built the privatized group into Russia’s most Western-like company before he was arrested on fraud and tax evasion charges.
For his part, Stuart Eizenstat, a former US deputy treasury secretary, and other foreign advisors to the company that controls Yukos urged Western governments to denounce the state expropriation and defend the rights of foreign minority shareholders.
Eizenstat denounced Moscow’s takeover as “one of the greatest corporate thefts in history”, adding, “It’s a reflection of the total and utter absence of rule of law. The desire is to put energy resources from oil and gas to pipelines under state control, in effect renationalizing the energy resources in Russia”, he told a reporter by phone from Washington.
ping.
russia: Putin defends state takeover of Yukos
......so Yukos (reinvented) can buy into Chinese Oil?
Interesting source: Syrian MSM.
I don't have a problem with what transpired. Indeed, I invested a large amount in a Russian mutual fund, and it has grown nicely in the last year.
I wonder what Mr. Eizenstat was saying back in 1996 when his friend Khodorkovsky bought the key Russian oil fields for $350 million in 1995?
Let us see (Corporate Scandal):
[...]
Khodorkovsky's firms :
Bank Menatep (or Menatep Bank)
Note that Menatep has also involved with the Bank of New York
money laundering case (see above).
Yukos - Yuganskneftegaz (Oil : 11 billion barrels in proven reserves)
Samaraneftegaz (Oil : 1.5 billion barrels in proven reserves)
Tomskneft (Oil : ? barrels)
Washington DC public relations firm hired by K: APCO Worldwide
Margery Kraus, APCO's CEO.
Stuart Eizenstat, formerly of U.S. Department of State, APCO employee,
Both the above are also members of MENATEP's international advisory board.
APCO has also worked on public relations for Vladimir Gusinsky, another oligarch.
[...]
11 billion barrels for $350 million it makes 31 cents for a barrel in proven reserves! And Mr. Khodorkovsky did not have to come with this $350 million - it was lent to him by the bank he controlled and the "auction" was controlled too.
Hey was Putin the screwer or the screwee? More to this than meets the eye.
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