Yukos’s Largest Oil Producer Bought by Unknown Group

MOSCOW – An unknown group made the only bid yesterday for the main production unit of Russia’s largest oil producer, Yukos, agreeing to pay $9.3 billion and gaining control of one of Russia’s most prized assets for half of what foreign auditors say it was worth.The sale of Yuganskneftegaz reduces the once-giant Yukos to a shadow of its former self, one of the heaviest blows to a company that has been the target of a persistent government campaign. The government says it only wants to collect $28 billion in back taxes. Yukos officials say the Kremlin, in particular President Putin, is punishing the company for the politics of its now-jailed founder.It was not known from where or if the buyer, BaikalFinansGroup, had accumulated the financing for the deal, and several analysts suggested the previously unknown company might be nothing more than a quickly formed front for Gazprom, the Russian state natural gas conglomerate that was the expected high bidder. Gazprom denied any links.After the auction, the Kremlin declared it would simply seize the Yukos production unit for taxes if payment was not received from BaikalFinans-Group within two weeks, according to Alexander Buksman, head of the Moscow branch of the Justice Ministry.Yukos founder Mikhail Khodorkovsky, Russia’s wealthiest man, has been in jail since his arrest on October 25, when black-uniformed special forces swept onto his airplane at a Siberian airport. He has been charged with fraud and tax evasion and is now on trial. The American oil executives he hired have fled the country.Yukos currently pumps nearly onefifth of all of Russia’s oil and supplies 2% of the world’s consumption. The auctioned unit produced 60% of Yukos’s output. Foreign auditors have said the west Siberian unit was worth about $18 billion, or nearly twice the $9.3 billion for which it sold. Yukos executives said the unit was worth as much as $30 billion.Virtually nothing is known about the winner except that it was registered in the city of Tver, in western Russia, and applied to join the bidding only after a Houston, Texas, court issued an injunction against the sale because of Yukos’s American bankruptcy filing. The ruling caused Western banks to freeze financing that was in place for the expected Gazprom bid. Gazprom, the state-controlled natural gas behemoth, was seen as the Kremlin’s favorite to buy the Yukos subsidiary.U.S. Bankruptcy Judge Letitia Clark granted Yukos’s request Thursday for a temporary restraining order delaying for 10 days the auction of Yuganskneftegaz, as the Yukos unit is known.After that decision, the banks – including Deutsche Bank, ABN Amro, BNP Paribas, and Dresdner Kleinwort Wasserstein – froze between $10 billion and $13 billion they had pledged to loan Gazprom for its bid, Russian and other news reports said Friday. The Russian government said the American court injunction was irrelevant.Questions immediately centered on BaikalFinansGroup’s relationship, if any, to Gazprom. Stephen Dashevsky, a leading analyst for Russia’s Aton brokerage, said the winner was likely affiliated to Gazprom.Paul Collision of the Brunswick brokerage said that Gazprom or not, the true buyer was undoubtedly Kremlin connected and had used an unknown company in hopes of avoiding litigation.

Yukos’s Largest Oil Producer Bought by Unknown Group

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