- The Washington Times - Monday, January 17, 2005

MOSCOW (Agence-France Presse) — Yukos warned yesterday that it would take legal action against anyone who deals with Russia’s state-controlled oil company Rosneft that won control of Yukos’s main production unit in a disputed auction.

“This was a case of expropriation,” Yukos attorney Robert Amsterdam said.

“Every legal and regular step will be taken to challenge this,” he said.

Yuganskneftegas, the main Yukos production asset that pumps as much oil as the state of Texas, fell into Rosneft’s hands as the result of a bizarre auction last month in which the initial winner was an unknown shell companythat quickly resold its stake.

Mr. Amsterdam was adamant that Yukos would challenge anyone who deals with Rosneft in the wake of the auction, which he called illegal.

“Not a drop of that oil is legally owned by anybody but Yukos. Everyone who deals with them” will be subject to lawsuits, he said of Rosneft and its potential customers or investors.

Rosneft is in the process of uniting with Russia’s natural-gas giant Gazprom, creating an energy monolith reminiscent of the Soviet-era energy ministry with the world’s largest confirmed gas and oil reserves.

But Yugansk currently is being held by a separate government entity and will not be a part of the Rosneft-Gazprom venture.

Analysts think Yugansk is being held separately by the state to shield both Rosneft and Gazprom from litigation.

Yukos argues that the seizure of Yugansk to pay back taxes was illegal because Russian law forbids the government from grabbing a company’s main asset first in tax disputes, and requires it to first seize smaller assets.

Yukos’ tax debt has reached $27 billion, according to the government, more than the company’s net revenue for some years.

The company, once Russia’s largest oil exporter, charges that the case against it is selective and political in nature, with the government frightened by Yukos’ growing power and founder Mikhail Khodorkovsky’s decision to enter politics in opposition to President Vladimir Putin.

Mr. Khodorkovsky is in jail facing charges ranging from embezzlement to tax evasion that could keep him behind bars for at least 10 years.

Imprisoned since his October 2003 arrest, Mr. Khodorkovsky was slapped with an additional money-laundering charge on Friday.

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