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Yukos affair affects world oil market - experts

Experts believe the situation around Russia's biggest, until recently, oil producer Yukos has begun to affect world oil market.

As Yukos managers announced that arresting the company's accounts threatened to stop sustained oil production, world crude prices crept up to 39 U.S. dollars per barrel.

Yesterday Yukos shares dropped in London to draw down American Depository Receipts of other Russian companies. Yukos fell by 10.4% as the Russian Tax Ministry gave the company five days to pay off its tax bills.

However, major Yukos shareholders still hope for the best.

"Shareholders continue settlement negotiations, trying to pay off tax claims against the company by transferring part of their shares," a source close to Yukos shareholders said.

New Tax Ministry's payback claims against the oil giant are just the tip of the iceberg, experts believe. Taxmen have not yet investigated into the company's performance in 2002 and 2003, and soon 2004 will end, which will give them another field to play on. So far payback claims against Yukos for 2000 and 2001 amount on aggregate to about 200 billion rubles, which makes almost 7 billion dollars. Analysts presume the Tax Ministry can raise the worth of the final bill to 300 to 400 billion rubles.

According to chief analyst of financial company Megatrastoil Alexander Razuvayev, "New taxmen's claims [against Yukos] could hardly be called unexpected. Market operators knew what was going to happen."

He said that Yukos was facing long-term problems, and it would be premature to talk about any "peaceful settlement."

"I do not think there are some agreements between Yukos and the state as to the debt postponement. At the same time, Yukos management's debt settlement proposal is an optimal way out for both sides," Razuvayev said.

"Although the Tax Ministry has laid new claims [against Yukos], we think it is too early to order wreaths to Yukos's grave," chief ofthe analysis department of Moscow-based brokerage Brokerkreditservis Maksim Shein said. He added that no company could receive its exports revenues if its accounts were arrested.

He described the company's primary target as "to pay off claim number one." "Problem 2001 can be postponed until January 2005, with the [usual] distance from Tax Ministry's early announcements to a receiving order being about six months. The situation around the company may change greatly in the course of time," he added.

Meanwhile, the possibility that the Tax Ministry will sue Yukos in court for another 98 billion rubles tax paybacks on Friday or early next week is by no means ruled out. The sum has emerged as a result of inspection of the company's tax record for 2001. Experts say the taxmen are in a hurry to strip Yukos of the money.

Yesterday bailiffs came to Yukos's head office with a receiving order and ordered the oil giant to pay back 99.4 billion rubles of taxes underpaid for 2000 within five days.

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