Russian minister not keen on Yukos buy
December 2, 2004
Moscow - Russia's economy minister German Gref has been trying to put the brakes on plans for the state-controlled Gazprom monopoly to buy the main production unit of the Yukos oil giant, reports said Thursday.
On Tuesday, a top official at Gazprom said the behemoth would bid for Yukos's Yuganskneftegas at a December 19 auction, confirming long-held rumors that the state would take over the unit that produces about the same amount of oil per day as the US state of Texas.
But Gref, the economic trade and development minister, prevented Gazprom's board where he holds a seat from approving the measure later in the day, Vedomosti reported.
"It was clear at the board meeting that he did not agree with it," the respected Vedomosti quoted an unnamed board member as saying.
Gazprom board member Boris Fedorov said in a conference call that Gref has "certain reservations" about a potential bid, according to the UFG brokerage.
Gref was concerned that the purchase would open Gazprom to lawsuits from Yukos shareholders, amid strong doubts that the auction is legal, according to Vedomosti.
The minister was also concerned that, in order to raise cash for Yugansk, Gazprom planned to scale back its investments by some 3.6 billion dollars and borrow the rest to cover the 8.6 billion dollars starting price, the official told Vedomosti.
As a result of his concerns, the board put off approving its 2005 investment program, which includes the Yugansk purchase.
Gref kept up his criticism on Wednesday, telling deputies at the State Duma that he does not approve of "an increased government presence in market sectors of the economy," a clear allusion to the deal.
Yugansk is the crown jewel of Yukos, pumping some one million barrels of oil a day, and rumors have swirled around Russia's market for weeks that the government would try and take control of it through an affiliate.
An official in the Kremlin administration told Vedomosti that Gazprom's board is unlikely to approve the Yugansk purchase without a green light from the government.
"If the government approves Gazprom's investment program for 2005, which includes the Yugansk purchase, that will mean that the monopoly has received a green light," the unnamed official was quoted as saying.
The cabinet was due to examine Gazprom's 2005 investment program on Thursday, but delayed the issue until the end of December, Interfax reported.
Earlier Interfax quoted an unnamed official close to Gazprom's board as saying that it would decide on the Yugansk bid by December 7.
The state is auctioning off 76.79 percent of Yugansk, which accounts for more than 60 percent of production at Yukos, in order to cover what it claims is $24.5 billion in back taxes, penalties and fines that the firm owns. - AFP
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