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British Court Could Seize Rosneft Assets in Yukos Lawsuit


Wednesday, March 17th, 2010

Rosneft, the Russian majority state-owned oil company, had its shares take a hit today as it announced a British court could seize assets of the company from the lawsuit filed by executives who used to work for Yukos Oil.

This particular case is an extension of a lawsuit lost by Rosneft in 2007, where a branch of Yukos was awarded $380 million, but have been unable to collect up to this time.

Even if the $380 million is recovered, that's not that big of a deal for Rosneft, as it generated $46.8 billion in revenue in 2009 and had profits of $6.5 billion.

What the real threat to the company is it could set a precedent for other cases which are in the midst of being tried.

The stakes are huge there, as one of the cases involve up to $100 billion, where former shareholders and executives of Yukos are trying to reclaim what they say was the value of the company at the time they were taken over by Rosneft.

Most of this centers around what some conider a politically motivated tax-fraud case from 2003 to 2007 in Russia concerning Yukos, which ultimately bankrupted them and resulted in the best assets of the company being acquired by Rosneft.

If this does rule in favor of Yukos, it could result in the reverse happening and Rosneft being dismantled. But with the Russian government being the majority owner in Rosneft, it's highly unlikely we'll see that happen, or even if it did, that they would give up the assets they now hold.

Rosneft accounted for about 20 percent of all oil production in Russia in 2009.



Article by Gary B

The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com



Tags: britain , rosneft , russia , yukos