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Yukos emerges from the
gloom
By Sergei Danilochkin
PRAGUE - Yukos, Russia's embattled oil giant, is
showing signs of a comeback. The company has seen its
prospects fall precipitously since last year's arrest of
chief executive officer Mikhail Khodorkovskii and other
top managers on charges of tax evasion and fraud.
But after a bitter winter, Yukos is experiencing
a rebirth. Lev Snykov, an analyst with the Moscow-based
NIKoil investment firm, says that Yukos stands a very
good chance of recovering its market position after a
period of sharp stock depreciation. "Generally speaking,
Yukos remains a stable operation," he said. "It remains
a stable business because of the increase in exports and
high oil prices. Yukos has more than US$3 billion in
cash reserves as of last year's nine-month balance.
Fundamentally, Yukos remains a very strong company.
In business terms, Snykov says, Yukos remains
much the same company it was last October, when federal
security agents stormed a private plane, arresting
Khodorkovskii in a move many observers said was ordered
by a government anxious to silence the politically
outspoken - and liberal-leaning - billionaire.
Even now, Khodorkovskii remains in a Moscow
prison and the company's management has undergone a
necessary makeover, with major Yukos shareholders
removed from executive positions. Snykov says that those
changes have had a positive affect on the company's
image, removing the taint of political scandal and
allowing the firm to focus exclusively on business.
"The most important thing is that nothing has
changed in the company's operations and strategy. During
[the past year], Yukos has shown very good financial and
operational results. Until the end of 2003, Yukos
remained the most successful Russian oil company,"
Snykov said.
Dmitrii Tsaregorodtsev, an analyst
with the Prospect investment company, agrees the new
Yukos management team - led by Semen Kukes - is having a
positive affect. "The most noticeable figure is Semen
Kukes," he said. "He is known as a well-paid specialist
[with no investments in the company]. On the one hand,
he is an absolutely credible contact for the Western
partners. On the other hand, he perfectly understands
the realities of Russia and, to a certain extent, he is
more inclined than anyone from the former management
team to compromise [with the authorities]. His main goal
is to preserve the company. The shareholders may come
and go. But for the company's sake, its integrity must
remain."
Preserving Yukos's international image
is important for the new management team, in terms of
aiding both the company's international projects as well
as the future of its integrated operations.
The
Russian company Menatep, which holds a 44 percent stake
in Yukos, is rumored to be considering selling its
shares. If it did, Yukos would undoubtedly seek out a
lucrative deal with a Western company to buy up the
stake. To that end, Tsaregorodtsev says that the new
management is doing its best to protect the assets of
the company's foreign minority investors - which include
the Swiss bank UBS and a US state pension fund.
So many of the company's prospects are good. But
all the same, Tsaregorodtsev says, it is not possible to
say that Yukos has emerged entirely unscathed from the
Khodorkovskii affair. "I think that Yukos has changed.
In the first place, it lost some of its ambition," he
said. "In other words, the company was clamped down on,
held by the bridle, and stopped, you know? And on top of
that, one of the real power centers has completely
disappeared from the [Russian] political arena. The
center that was transmitting extensively to Russia's
Western ideas."
Then there is Yukos's
near-merger with Sibneft. The deal was recently called
off, but even the talks weren't cheap: Yukos paid some
$3.7 billion to buy out 10 percent of its shares from
the market, as part of the merger agreement. Now, with
market rates falling, Yukos is unlikely to recover the
money it spent.
Moreover, changes in Yukos's
credit ratings and company image have seriously damaged
its ability to acquire foreign assets - something that
Tsaregorodtsev says was once a key facet of company
strategy. Analysts also doubt Yukos will play a dominant
role in developing attractive new prospects in oil-rich
eastern Siberia. These operations are likely to expand
energy cooperation between Russia and China.
And
Yukos remains the target of political attacks. Russian
media sources recently reported that Yukos had
contributed to the campaigns of candidates opposing
Putin in the March presidential elections - much as the
company had (unsuccessfully) supported opposition
parties seeking to counterbalance pro-Kremlin centrists
in parliamentary elections last December. One of the
presidential candidates mentioned in the media reports
was Irina Khakamada, a co-founder of the Union of
Rightist Forces.
Khakamada categorically denied
the reports in an interview with RFE/RL. "Yukos is not
financing [my presidential campaign] and has nothing to
do with it," she said. "It is a company that is
experiencing huge problems and is preoccupied with its
market position. And as you know, they are removing all
investors [from the management]."
Russian
political analyst Andrei Piontkovskii says that he
believes Yukos has suffered only minimal business losses
because in the end, the Kremlin got exactly what it
wanted - the removal of Yukos shareholders from Russia's
political scene. So what are the prospects for settling
the Yukos conflict now that Russian authorities have
achieved their goal?
"Only the head of state can
give the final answer to this question," Piontkovskii
said. "It is obvious that the initiative for the attack
on Yukos comes from him. It seems that the authorities
have started to realize that putting excessively
aggressive pressure [on Yukos] will affect Russia's
position internationally as well as the personal
position of Vladimir Vladimirovich Putin."
The
weekend's resolution of a Yukos tax evasion case may be
a sign that the Kremlin is softening its stance on the
oil giant. A Moscow court found former top manager
Vasilii Shakhnovskii guilty, but allowed him to go free,
due to what the court called "changed circumstances".
The court also cleared Shakhnovskii of separate forgery
charges. Shakhnovskii voluntarily paid some $1.8 million
in back taxes and penalties last year after the charges
were leveled.
Piontkovskii says that news like
this leaves him cautiously optimistic that Yukos will
eventually recover its market status.
Copyright (c) 2004, RFE/RL Inc. Reprinted
with the permission of Radio
Free Europe/Radio Liberty, 1201 Connecticut
Ave NW, Washington DC 20036
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