OAO Yukos has fulfilled its warning that the Russian government's plan to auction a seized oil producing subsidiary would force it into bankruptcy.
The company, once Russia's most aggressive oil company, on Dec. 14 filed a voluntary petition for reorganization in the US Bankruptcy Court for the Southern District of Texas, Houston Division. It asked for an emergency hearing on its motion for injunctions against the Russian government's planned auction on Dec. 19 of 77% of Yuganskneftegas, its largest unit (OGJ Online, Nov. 19, 2004).
In a move Yukos CEO Steven Theede characterized as "a mockery of the protection of private property," the government last July announced the forced sale of Yuganskneftegas to settle allegedly unpaid taxes that might exceed $10 billion.
Yuganskneftegas produces 88,000 b/d of oil, according to Yukos, 60% of the company's total.
"If allowed," Yukos said in a statement, "the sale of Yuganskneftegas will cause the company to suffer immediate and irreparable harm."
The company noted that Russian authorities have frozen its bank accounts and assets "as part of an unprecedented campaign of illegal, discriminatory, and disproportionate tax claims escalating into raids and confiscations, culminating in intimidation and arrests."
The company's problems began with the Oct. 25, 2003, arrest of Mikhail Khodorkovsky, its former chief executive, on charges of tax evasion. Khodorkovsky, a critic of Russian President Vladimir Putin, remains in jail.
Yukos said the tax claims against it represent more than 100% of 2001 and 2002 consolidated gross revenues and 80% of 2003 revenues.
The crack-down, it said, has slashed its value in stock markets by an estimated $38 billion.
Yukos filed for reorganization in the Houston court, it said, because US bankruptcy law has worldwide jurisdiction over property of the debtor, "and the company is seeking a judiciary that will protect the value of all shareholders' investment in Yukos." The company's chief financial officer is working in Houston, according to the statement.
Theede said the company has tried during the past year to open discussions with the government and submitted more than 70 settlement offers.
"It is regrettable that we did not receive one substantive response," he said. "The steps we took today were done as a last resort to preserve the rights of our shareholders, employees, and customers."
According to Russian press reports, a British investment group has proposed to buy Yukos shares held by Khodorkovsky and his partners in a bid to settle the tax claims after the sale of Yuganskneftegas and save the company.
In a related development, Russian Natural Resources Minister Yuri Trutnev told journalists on Dec. 14 that buyers of the Yuganskneftegas would receive concessions helping them settle the tax claims. State-owned Gazprom is considered the most likely buyer.
