Rosneft to Replace Yukos as Key Supplier to China Combined Reports
State oil firm Rosneft will replace stricken oil major Yukos as Russia's key supplier to China next year after it bought Yukos' core oil unit last week, the head of Russian Railways, or RZD, said Wednesday.
Gennady Fadeyev told a news conference Rosneft would supply 4 million tons of crude to China by rail in 2005.
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Khristenko: China May Buy 20% of Yugansk By Dmitry Zhdannikov
China emerged Thursday as a dark horse contender for the assets of Yukos as the company's state-driven breakup took yet another abrupt twist.
Amid intense speculation over who will become the ultimate owner of Yukos' million-barrel-per-day oil unit, Yuganskneftegaz, Industry and Energy Minister Viktor Khristenko said Chinese oil giant CNPC may end up with a one-fifth stake.
Khristenko's comments came after President Vladimir Putin's chief of staff said Yugansk, bought at auction by state oil firm Rosneft for $9.4 billion, would not be included in Rosneft's planned merger with Gazprom.
"The assets of Yuganskneftegaz will be spun off and transferred to a separate company, 100 percent owned by the state," Khristenko said in a statement. "Up to 20 percent of the shares in this company may be acquired by the Chinese National Petroleum Corp. Such an option was mentioned in documents signed earlier with CNPC."
CNPC, parent of New York-listed PetroChina, could not be reached for comment.
The Yugansk auction was the climax of a Kremlin campaign to crush Yukos' politically ambitious principal owner, Mikhail Khodorkovsky, and seize control of strategic sectors of the economy sold off in the chaotic privatizations of the 1990s. Yugansk, which pumped 1 million barrels per day or 60 percent of Yukos' output, was sold to help recover back taxes owed by Yukos of more than $27 billion.
§ Yukos, which filed for bankruptcy in the United States in a bid to block the Yugansk sale, accused Khristenko of shielding Rosneft and Gazprom from legal responsibility for the "illegitimate and dim-witted sale of Yukos' core asset." Yukos earlier placed newspaper ads vowing to use all available legal avenues to recover damages it puts at $20 billion from any person or entity involved in the Yugansk sale.
Bringing in China, hungry for Russian oil to fuel its booming economy, could "help Russia legitimize the nationalization of Yugansk in the eyes of the international community," said Steven Dashevsky, oil analyst at Aton brokerage.
But Putin's outspoken economic adviser, Andrei Illarionov, did not buy that theory.
"Actions are being taken that are bringing colossal damage to the country," said Illarionov, a critic of the Yukos breakup who appears to have been frozen out of the Kremlin inner circle.
"This is being done by monstrously unqualified and unprofessional people and ... the basis for this is nothing other than a desire to expropriate private property," he told Ekho Moskvy radio Thursday.
Earlier, Gazprom chairman Dmitry Medvedev, who also heads the Kremlin administration, said Gazprom's $7 billion to $8 billion takeover of Rosneft would go ahead as planned in January -- minus Yugansk's Siberian oilfield assets.
His statement came a day after Economic Development and Trade Minister German Gref said the merger, originally targeted for this year, would have to be put on hold until the structure of the Yugansk purchase was clear.
The conflicting signals reflected possible confusion as the Kremlin reworks its strategy for building a national energy champion to rival Western oil majors and big OPEC producers.
"Unfortunately, the whole mess that is the Yukos affair seems destined to spill over into 2005," said Matthew Thomas, an oil analyst at Alfa Bank.
It is still unclear how Rosneft, which had debts of $4.4 billion at mid-year, will pay for Yugansk. It has so far raised just $1.7 billion by selling joint venture assets to Gazprom and must pay the full sale price by early January.
Gazprom had been the initial favorite to win the Yugansk auction, but pulled out at the last minute after Western banks syndicating a 10 billion euro ($13.60 billion) loan, led by Deutsche and ABN Amro, got cold feet.
In the merger, Gazprom will take over Rosneft in return for 10.7 percent of its treasury stock, enabling the state to regain control of the world's largest gas company and paving the way for restrictions on foreign share ownership to be scrapped.
n Gazprom confirmed reports that it had obtained substantial stakes in two joint-venture projects to develop major gas and oil fields, The Associated Press reported.
The company said in a statement that it had bought a 49.95 percent stake in a joint venture to develop offshore fields in the Barents and Pechora seas from Rosneft and a 50 percent stake from a Rosneft subsidiary in a joint venture to develop the Shtokman gas and condensate field in the Barents Sea and the Prirazlomnoye oil field in the Pechora Sea. Other partners in the joint ventures are Rosneft subsidiaries.
Belgian gas trader Distrigas said Thursday that it has signed a contract with a Gazprom unit for the transit of gas to the growing British market, Reuters reported.
Distrigas said Gazprom's Gazexport unit will transit up to 2.5 billion cubic meters per year of gas from Eynatten at the German border with Belgium to the port of Zeebrugge.
The contract is effective until 2018.
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