With the recent announcement of the pending joint venture transaction between ExxonMobil and the Russian state-owned oil company Rosneft, the Russians were asking the world to sweep under the rug their blatant theft of Yukos Oil Co.
Yet Rosneft was among the parties to most benefit from bogus auctions of multibillion-dollar assets and the sham bankruptcy and expropriation of Yukos, once Russia’s largest, most transparent, best-governed and most profitable oil company. From the beginning, Rosneft played a key role in Yukos‘ demise. Today, former Yukos assets make up more than three-quarters of Rosneft’s value.
In September, the European Court of Human Rights ruled that illegal tax and court actions had indeed led to Yukos‘ forced bankruptcy. Now the court has asked both sides to begin “just satisfaction” negotiations - which, in effect, means a price tag will be placed on Russia’s penalty. Yukos will soon submit its significant request for reparations, and the ball will then be firmly in Russia’s court.
ExxonMobil is joining forces with a company built on stolen assets. Unfortunately for ExxonMobil, this is the only option it has to access high-risk Russian Arctic exploration assets that could very easily contain massive reserves. Conversely, the deal will give Russia’s state-controlled oil company a foothold in U.S. reserves and offer access to sensitive energy and other kinds of technology. But Prime Minister and President-elect Vladimir Putin and his band of thugs have hardly been friendly to the United States.
Russia stole Yukos, and everyone knows it. Russia hopes this deal will go forward without a fuss. More than 50,000 Yukos shareholders and individual and institutional investors in the United States and elsewhere were wrongly deprived of their investment by illegal Russian actions. A fuss must be made. Shareholder voices must continue to be heard.
BRUCE K. MISAMORE
Former chief financial officer