Russia's Rosneft new owner of main Yukos subsidiary
(Agencies)
Updated: 2004-12-23 08:53

Russian state oil company Rosneft has become the new owner of Yuganskneftegaz by buying 100 percent of the shares of previously unknown Baikalfinansgroup, which had purchased the main subsidiary of Yukos in an auction, the Interfax news agency reported.

"Rosneft has bought 100 percent of the shares of Baikalfinansgroup," a spokesman for the company said, quoted by Interfax.

Front pages of Russian main newspapers with articles about mystery bidder, Baikalfinansgroup. Russian state oil company Rosneft has become the new owner of Yuganskneftegaz by buying 100 percent of the shares of previously unknown Baikalfinansgroup, which had purchased the main subsidiary of Yukos in an auction, the Interfax news agency reported. [AFP/file]

He said Rosneft's development projects included "the transformation of the company into a balanced national energy corporation through the development of the company's production facilities."

Rosneft, the last major oil company owned by the Russian state, is the seventh biggest group in the sector in Russia. It produced 19.4 million barrels of crude in 2003.

A plan to merge Rosneft and the Russian gas giant Gazprom was announced in September for the end of the year but has been on the back burner ever since.

In a Sunday auction cloaked in secrecy, Russian authorities broke up Yukos, the country's largest oil producer, selling its main subsidiary Yuganskneftegaz to Baikalfinansgroup, a previously unknown entity, for US$9.35 billion(seven billion euros).

Gazprom was a strong favourite at the auction, and success would have enabled it to become not only a gas giant but an oil player on an international scale.

However, 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.

On Tuesday Russian President Vladimir Putin said that he knew the mystery buyer that won an auction for the main asset of Yukos, adding that a state firm could eventually acquire the key energy concern.

The people behind Baikalfinansgroup would hold talks with other Russian energy groups interested in the asset, Putin said.

"As far as I know, the shareholders are individuals, they worked many years in the energy sphere," Putin said.

The auction provoked sharp criticism in Washington and other Western capitals, amid concern the sale was a capricious move designed to further the Kremlin's designs on the national energy industry.

Interfax reported a source close to the group as saying earlier Wednesday that Yukos sent a letter to Russian Prime Minister Mikhail Fradkov on legal action it might take following the forced sale of its main unit.

In the letter, Yukos management proposed paying its back taxes through revenues, the sale of non-core assets and shares of its main shareholders.

Yukos warned it could sue Baikalfinansgroup and shareholders could sue the government, tarnishing Russia's image in investors' eyes.

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