In a surprise move, the Russian government announced Thursday that Yuganskneftegaz (“Yugansk”) — the main oil production unit of bankrupt Russian oil giant OAO Yukos — will not be conveyed to to Russian gas giant OAO Gazprom as widely anticipated. Rather, the Russian government announced that Yugansk will be used to create a new government-owned oil company and that a minority stake of up to 20% in that company will be offered to China’s state energy company.
Here are the earlier posts on the Yukos chapter 11 case and related matters.
The new plan for Yugansk will be a major shot in the arm for China’s efforts to obtain access to new fuel reserves for its burgeoning economy. China’s economy has been the largest factor in the surging world oil demand of recent years, but the Russian government has heretofore always declined Chinese efforts to invest in the Russian oil and gas industry. The plan also confirm that the Russian government’s campaign against Yukos will result in the re-nationalization (is that a word?) of a large part of what had been Russia’s largest oil unit and one of the relatively few Russian companies that was able to attract foreign investors.
Gazprom is controlled by the Russian government but also has private shareholders. After a Houston Bankruptycy Court enjoined Gazprom and Western Banks two weeks ago from participating in the Russian government’s controversial auction of Yugansk to pay for Yukos’ alleged $28 billion tax debt, Gazprom appeared to have found a way around the TRO by using the Russian oil company OAO Rosneft to acquire Yugansk. Gazprom and Rosneft are in the process of merging.