Russia’s State-Run Gazprom Will Bid for Yukos Unit
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
OAO Gazprom, Russia’s state-run natural gas company, will bid for OAO Yukos Oil Company’s biggest unit and may buy other domestic producers to create an oil business rivaling that of ExxonMobil within six years.
The company plans to bid next month for OAO Yuganskneftegaz, which is being sold so the government can collect more than $20 billion in back taxes from Yukos, the head of Gazprom’s oil unit, Sergei Bogdanchikov, told reporters in Moscow yesterday.
Gazprom, which intends to buy the state oil company OAO Rosneft, may pump 2.5 million barrels a day in 2010, he said, equaling Kuwait.
“This is positive for Gazprom but negative for the country,” said Maarten De Kok, who manages more than 2 billion euros ($2.65 billion) at Robeco Group in Rotterdam. “It’s a question of whether you believe in efficient state run companies or not. And I do not. There’s so much politics involved here that I’m reluctant to welcome it as an investor in Russian equities.”
President Putin is expanding control over Russia’s $434 billion economy and tightening his grip on the government. Mr. Bogdanchikov said Gazprom is considering the advice of Deutsche Bank AG to buy OAO Surgutneftegaz, Russia’s fourth-largest oil company, and OAO Sibneft, the oil producer controlled by Roman Abramovich, a billionaire now living in London.
“Gazprom should have two equal businesses,” oil and gas, Mr. Bogdanchikov said. “We must have a world-class company” similar to ExxonMobil, he said. “Yugansk is the most attractive asset. To have just organic growth wouldn’t be enough for us.”
Gazprom controls the world’s largest natural gas reserves and lacks a signifi cant oil business. Rosneft pumps 426,600 barrels of oil a day and Gazprom extracts some 217,000 barrels of gas condensate, an oil-like mixture of hydrocarbons. Russian oil output this year may total 9.2 million barrels a day.
ExxonMobil last year produced an average 2.52 million barrels of oil and 10.1 billion cubic feet of gas a day.
Russia plans to sell Siberia-based Yuganskneftegaz for at least $8.6 billion to cover part of Yukos’s tax bills.
Gazprom’s management will need board approval for such a bid.
The chief executive of Yukos, Steven Theede, said he hopes to avoid a sale and breakup of the company, but isn’t sure what the authorities want, the Wall Street Journal reported yesterday. Yukos’s biggest investor, Mikhail Khodorkovsky, is in prison on charges of tax evasion and fraud, allegations he dismisses as politically motivated.