10 December 2003 01:44
Yukos/Sibneft THE LEX COLUMN:
The dowry may have changed hands, but the Yukos-Sibneft marriage was over
before it was consummated. Equity market reaction to the erstwhile partners
is likely to differ. Sibneft, back in play as a takeover prospect of
digestible size for foreign oil companies, should find support. But Yukos is
likely to remain under pressure. It faces the unattractive cocktail of a
major shareholder who has been incarcerated, oil production licences under
threat and a potential tax claim for Dollars 5bn. Further attacks on the
company cannot be ruled out.
The strategic need for foreign multinationals to replace depleted reserves
through expansion into Russia remains strong. But the oligarchs' control
of the oil industry is, if not quite finished, seriously under threat.
Changes to taxes on refined oil products and the removal of regional tax
breaks already point to a tougher line. The probability has risen that the
sector's tax burden will increase further. Sunday's parliamentary
elections strengthened President Vladimir Putin. There was also a strong
showing for the Motherland party, which favours greater taxation of the
oligarchs.
Even ignoring uncertainty over the sanctity of private property in Russia,
oil companies may face lower potential rates of return on Russian
investments. A more nationalist Duma could also be hostile to foreign
interests. Roman Abramovich, Sibneft's main shareholder, will be a tough
negotiator, but foreign buyers will be reluctant to pay up for Russian oil
assets.
[FTI [The Financial Times]] |
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