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. Last Updated: 07/27/2016

Yukos Posts 1998 Loss of $200M

Russian oil major Yukos announced a 1998 loss of 1.92 billion rubles ($200 million) and outstanding debts of some $800 million at its annual general meeting this week, but Yukos head Mikhail Khodorkovsky said the company's finances had improved significantly in the first quarter of this year.

Khodorkovsky told shareholders at Tuesday's meeting that Yukos had also shored up its financial situation by cutting a restructuring deal on hundreds of millions of dollars in debts. Khodorkovsky said Yukos is confident it will be able to meet its obligations.

Yukos did not provide consolidated results in its financial reporting, making it difficult to evaluate Khodorkovsky's assertions more carefully. The consolidated results will be made public in September, Yukos officials said Wednesday. Until then, the figures cited at this week's shareholders meeting are "meaningless," Alexander Agibalov, oil and gas analyst with Aton, said.

Most industry observers are, for now, focusing on production data for Yukos.

Production at Yukos last year declined 4 percent to 34.1 million tons of crude oil and refining was down 9 percent to 20.1 million tons processed. Together with Eastern Oil, acquired in December 1997, Yukos extracted 44.8 million tons.

This year Yukos had originally planned to extract 42 million tons, but has since raised its hopes to pumping out 44 million tons.

Yukos was especially vulnerable to last year's economic downturn because of a major investment and acquisition program in 1996 and 1997 that left the company's core oil business without badly needed working capital.

Large debts were accumulated, many of them short-term ones. Now those debts, despite being restructured, make it harder for Yukos to raise further financing. Another potential drag on seeking new outside financing are several long-running disputes with minority shareholders and creditors.

Still, Yukos will need to make fresh investments if it is to meet its stated aim of becoming "the most efficient oil company in Russia."

Yukos made capital investments worth 2.7 billion rubles ($300 million) in oil extraction, but this is almost four times less than LUKoil, which extracts almost twice as much crude oil as Yukos.

This week Yukos gave 8 out of 25 seats on the Yukos board to foreign shareholders. One of those shareholders, Daiwa Europe Limited Bank, had sold its Yukos stake to South Africa's Standard Bank, which had already held a 1.5 percent stake, after the register for Tuesday's shareholders meeting closed some two months ago, Reuters reported.