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. Last Updated: 07/27/2016

Rosneft: Pass Yugansk Bill to Yukos

Rosneft wants to pass on billions of dollars of tax claims against Yuganskneftegaz to the shareholders of Yukos, which used to own the production unit, Interfax reported Thursday, citing Rosneft president Sergei Bogdanchikov.

"A certain type of management which Yukos had in relation to Yugansk resulted in a loss for the company," Bogdanchikov said at a news conference in Yuzhno-Sakhalinsk, Interfax reported.

"There are $5 billion in tax claims against Yugansk alone, and we must present the claims to the Yukos shareholders who mismanaged the company."

The surprise announcement, yet another twist to the Yukos saga, indicates Rosneft will seek to pin the tax claims against Yugansk onto Group Menatep, which controls Yukos and has been locked in a messy battle with the Kremlin for more than a year and a half.

State-owned Rosneft said late December that it had taken control of Yugansk by buying little-known shell company Baikal Finance Group, which bought a 76.6 percent stake in Yugansk for $9.3 billion at a Federal Property Agency auction on Dec. 19.

If successful in its bid to transfer the debt liability, Rosneft would have bought control of one of the country's top oil producers for a considerable discount on its real worth, estimated at more than $20 billion, because back tax claims were seen to have decreased Yugansk's value.

"I thought the whole reason for such a low valuation of Yugansk was the tax claims -- that was the only justification for the giveaway price," Group Menatep director Tim Osborne said by telephone Thursday. "I can't believe any of these people really think the world still takes them seriously."

"Anything is possible in Russia, as there is no rule of law. It would of course be impossible in a country with the rule of law," Osborne said, when asked if he thought Bogdanchikov's attempt to hold Yukos shareholders liable was enforceable. Menatep spokesman Yury Kotler agreed, saying by telephone that lawyers had told him there was no way in international "or even Russian" law that the liability could be transferred.

As the Yukos affair spins further into chaos, government ministers and executives at Gazprom and Rosneft have offered a bewildering array of conflicting explanations about the fate of Yugansk, the financing of its purchase and the government's plans to merge Rosneft into Gazprom.

The merger is part of a plan to establish formal state majority ownership over Gazprom and is seen as a first step toward liberalizing Gazprom's share ownership, the Holy Grail for Russia-watching fund managers. But those plans have been complicated by legal battles in Houston, where Yukos won a temporary court order that prohibited anyone linked with, or acting for, Gazpromneft or some named banks from participating in the auction.

Yukos said it would pursue legal action against anyone who took part in the purchase, sale, transfer or financing of the Yugansk sale.

An unidentified government official told Interfax late Thursday that the terms of the Rosneft takeover will be defined after Feb. 16-17, when a Houston court will hear a countersuit by Deutsche Bank, one of the banks named in the temporary restraining order, challenging the December ruling.

Economic Development and Trade Minister German Gref said Thursday that the Gazprom-Rosneft merger would be decided by the end of this month. "We are not moving away from the idea of securing a controlling stake in Gazprom and liberalizing the share market. The idea will be realized -- the question is how," Gref said, Interfax reported.

Rosneft and the Federal Tax Service could not be immediately reached for comment late Thursday.