Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Yukos Crude Exports Slow to a Trickle

Yukos, the country's largest oil exporter last year, is sending insignificant amounts of crude abroad and cannot say if or when exports will resume.

Yukos lost nearly all of the oil it exported when the government auctioned Yuganskneftegaz in December, senior vice president Alexander Temerko said in a phone interview from London late Thursday. Yugansk pumped over 1 million barrels of oil per day last year, 11 percent of Russian output.

Yukos' accounts remain frozen in connection with more than $27 billion in tax claims made against the company, crippling its ability to pay for transportation or services.

"We are sending some oil to China by rail, but these are crumbs compared with we used to export, insignificant amounts," Temerko said. "We can't forecast if we'll export because our situation is unpredictable."

Yukos had planned to send 250,000 tons (1.8 million barrels) of crude to China this month, Russian Railways said in January.

Yukos is also not exporting through pipelines, Temerko said. Companies such as LUKoil and TNK-BP have agreed to cover Yukos' export contracts in Hungary, Poland and other European countries, Temerko said.

"If they leave us with what we have," Yukos may resume exports, Temerko said. "But if they continue" it may "destroy us."

Tomsk Region Governor Viktor Kress is in discussions to help sell Tomskneft, a Yukos production unit located in his region, Vedomosti reported last month.

Most oil produced by Tomskneft and Yukos' Samaraneftegaz, which together account for more than 85 percent of Yukos' current 600,000 barrels per day of production, is processed at nearby Yukos-owned refineries.

Rosneft, the state-owned company that bought Yugansk, has begun sending oil to Yukos refineries, Temerko said.

"They seem to have about 1 million to 1.5 million tons of excess oil," Temerko said.

Yukos CEO Stephen Theede told Rosneft CEO Sergei Bogdanchikov in a recent letter that Yukos executives will not approve any transactions between Rosneft and Yukos subsidiaries, Temerko said.

"They won't even look at such transactions," Temerko said. Rosneft is sending oil for refining "at its own risk," he said.