Threat to Yukos oil sales lifted

By Douglas Busvine MOSCOW, Reuters

Russia lifted the threat of a halt to oil sales by the country’s largest oil firm Yukos on Thursday, prompting its shares to surge and easing tension on tight oil markets. The decision followed a day of drama Wednesday, when a warning by Yukos that an asset freeze ordered by bailiffs could hit oil sales by its operating companies, which pump a fifth of Russia’s oil, pushed U.S. crude oil futures to record highs.

“The Ministry of Justice has officially recalled the ban on property alienation it had previously imposed on Yuganskneftegaz, Samaraneftegaz and Tomskneft,” Yukos spokesman Yevgeny Fokin said in an e-mail to reporters. Oil prices fell from record levels on relief that oil supplies from Russia — the world’s number-two oil exporter — may not be disrupted. Eastern European customers Poland and Hungary said there were no problems with Yukos deliveries. Yukos shares rallied by over 20 percent after diving to three-year lows Wednesday, but the shares pared gains late on to stand 13 percent up at 94 roubles. “The companies themselves have regained legal control over their property, and above all the right to sell oil and carry out financial transactions,” a Yukos source said.

But the source said an existing ban on fixed-asset sales by Yukos’s operating units remained in force. Justice ministry letters released by Yukos confirmed that view. The justice ministry denied any intent to disrupt Yukos’s Siberia-based production operations. “The bailiffs’ activities are aimed neither at blocking the bank accounts nor the economic activities of Yukos’ subsidiaries,” a spokesman said. The apparent climbdown by the authorities may offer little respite for Yukos, which has said it could collapse by mid-August as bailiffs seek to recover a multi-billion dollar tax debt while its bank accounts and assets are frozen. A Yukos lawyer said the company would appeal a value-added tax demand which makes up US$1.6 billion out a total of US$7 billion in current and pending tax liabilities for 2000 and 2001.