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. Last Updated: 07/27/2016

Rosneft Closing In on Yukos Assets

bloombergAfter Rosneft filed a suit against Yukos for $5.8 billion, a Moscow court froze the oil firm's remaining key assets.
State-owned oil company Rosneft has come one step closer to gobbling up the remaining pieces of Yukos following a decision by Moscow Arbitration Court to impound the shattered oil giant's key assets.

The freeze was ordered by the court earlier this month after Yuganskneftegaz, which switched hands from Yukos to Rosneft last year, sued its former owner for 163 billion rubles ($5.8 billion) in lost revenue, Interfax reported Tuesday, citing a leaked court document.

A Yukos source, speaking on condition of anonymity, confirmed that the company had been notified of the asset freeze.

"It basically outlines what other Yukos assets [besides Yugansk] Rosneft is eyeing to get hold off," the source said.

The latest arrest includes all key remaining assets of Yukos: production units Samaraneftegaz, Tomskneft and Eastern Oil Co.; refineries in Syzran, Achinsk and Angarsk; and downstream units Tambovnefteprodukt and Irkutsknefteprodukt.

The court decision is unlikely to bring any immediate changes to the status of these units, as all of them are already under earlier asset freezes ordered last year as part of the towering $28 billion tax claims against Yukos.

Yugansk, Yukos' key production unit, was snapped up by Rosneft after a controversial auction in December called ostensibly to recoup some of the outstanding tax bill.

In addition to the $9.4 billion the government said it received for Yugansk, Yukos claims it has paid back some $5 billion in back taxes. The freeze on Yukos assets is set to remain until the remaining tax debt is repaid.

A ruling in favor of Rosneft, acting on behalf of Yugansk, would only add to the burden weighing down Yukos. The preliminary hearing is scheduled for Monday, Interfax reported.

"We expect the court ruling to a balanced and fair one," a Rosneft representative told the news agency Tuesday.

Rosneft's lawsuit is likely to speed up the demise of what was once Russia's No. 1 oil company.

"We do not rule out that this can happen as soon as the summer," a source close to Group Menatep, Yukos' parent company, told Interfax Tuesday. By fall, Yukos -- possibly headed by some of its current managers -- will be a company with entirely new shareholders, the source said.

It was unclear Tuesday how Rosneft's possible takeover of Yukos' remaining assets might affect President Vladimir Putin's plan to merge Rosneft with gas giant Gazprom. The tie-up has become bogged down by fierce disagreements over how it will take place and what assets will be included.

Kommersant reported Tuesday that the Economic Development and Trade Ministry is drafting a plan to privatize Rosneft in an attempt to wrench the oil company away from the State Property Committee, which currently controls the company.

The scheme involves moving a 100 percent stake in Rosneft into the charter capital of a newly created company called Rosneftegaz, which would then carry out a share swap with Gazprom to complete the merger.

The plan follows a scenario announced late last year by Industry and Energy Minister Viktor Khristenko, which later stalled over signs of a rift in the Kremlin over the merger. According to Khristenko's plan, Yugansk was to be carved out of Rosneft and made into a separate state-owned company.

Given signs of resistance to the deal among top Kremlin officials, it was unclear how successful such a bid to speed up the merger would be. Economic Development and Trade Ministry officials were not available for comment Tuesday.

 Crude prices rose back above $51 per barrel Tuesday, as a move by Russian authorities to freeze the main remaining Yukos assets unsettled markets, even amid expectations of further accumulation in U.S. crude stocks, The Associated Press reported.

Light, sweet crude for May delivery was up 75 cents to $51.12 per barrel by afternoon in Europe in electronic trading on the New York Mercantile Exchange. On Monday, the contract went as low as $49.66 -- its lowest in two months.