Yukos sells off subsidiary to pay its tax bill

MOSCOW – Yukos is in the process of selling a 56 per cent stake in a Siberian natural gas company to the Anglo-Russian joint venture TNK-BP in a bid to pay off its crushing tax bill, Western oil sources and media reports said yesterday.

The Russian newspaper Kommersant along with The Wall Street Journal and the Financial Times reported that the sale of Rospan has been concluded and that Yukos collected US$357 million (N$2,3 billion) in the process. A Western oil source said that the deal could be announced shortly but refused to confirm that a final agreement had been signed.Yukos officials refused to comment on the reports, which were interpreted as a rare bit of good news by analysts.Russian media and Western analysts reported that the justice ministry tried to stand in the way of the sale but was unable to do so because the deal was conducted through offshore companies based in Cyprus.”Yukos will use the money to help offset the back tax bill.Court bailiffs had opposed the sale, but appear to have been unable to block the sale as it took place largely offshore,” the Renaissance Capital investment bank said.The justice ministry has been engaged in a vicious year-long battle with Yukos that some analysts suggest is spinning out from under the Kremlin’s control.Yukos produces about 1,7 million barrels of oil per day – nearly as much as the current maximum output of Iraq – and fluctuations in its fortunes have in part helped push up global oil prices to historic highs.In the latest comment from Washington, the State Department said Colin Powell pressed the issue of Yukos during talks with Russian foreign minister Sergei Lavrov.A Russian foreign ministry statement reporting the conversation made no mention of Yukos.The company now faces a US$3,4 billion tax bill for 2000 that may balloon up to US$10 billion if the tax ministry pushes ahead with claims for alleged missed payments for 2001-2003.Its jailed executive Mikhail Khodorkovsky and his supporters charge that President Vladimir Putin’s team is trying to punish him for entering into politics and that the government is engaged in selective justice since other tycoons could face similar accusations.In another positive development for Yukos, the Russian railroad company in charge of its shipments to China said Yukos had paid 700 million dollars in transport fees that should keep the link operational through the start of September.News reports varied about which date the sum had been paid.Gennady Fadeyev, the Russian railroads chief, was quoted as saying by RIA Novosti that China had agreed to pay for transport fees should Yukos falter.There was no official comment on that statement from Chinese officials.-Nampa-AFPA Western oil source said that the deal could be announced shortly but refused to confirm that a final agreement had been signed.Yukos officials refused to comment on the reports, which were interpreted as a rare bit of good news by analysts.Russian media and Western analysts reported that the justice ministry tried to stand in the way of the sale but was unable to do so because the deal was conducted through offshore companies based in Cyprus.”Yukos will use the money to help offset the back tax bill.Court bailiffs had opposed the sale, but appear to have been unable to block the sale as it took place largely offshore,” the Renaissance Capital investment bank said.The justice ministry has been engaged in a vicious year-long battle with Yukos that some analysts suggest is spinning out from under the Kremlin’s control.Yukos produces about 1,7 million barrels of oil per day – nearly as much as the current maximum output of Iraq – and fluctuations in its fortunes have in part helped push up global oil prices to historic highs.In the latest comment from Washington, the State Department said Colin Powell pressed the issue of Yukos during talks with Russian foreign minister Sergei Lavrov.A Russian foreign ministry statement reporting the conversation made no mention of Yukos.The company now faces a US$3,4 billion tax bill for 2000 that may balloon up to US$10 billion if the tax ministry pushes ahead with claims for alleged missed payments for 2001-2003.Its jailed executive Mikhail Khodorkovsky and his supporters charge that President Vladimir Putin’s team is trying to punish him for entering into politics and that the government is engaged in selective justice since other tycoons could face similar accusations.In another positive development for Yukos, the Russian railroad company in charge of its shipments to China said Yukos had paid 700 million dollars in transport fees that should keep the link operational through the start of September.News reports varied about which date the sum had been paid.Gennady Fadeyev, the Russian railroads chief, was quoted as saying by RIA Novosti that China had agreed to pay for transport fees should Yukos falter.There was no official comment on that statement from Chinese officials.-Nampa-AFP