RusEnergy

14.04.2006 - The Moscow Times - Rosneft has consolidated its majority holding in Yuganskneftegaz, the huge production unit that once belonged to Yukos, the company said in a statement Thursday as it moved ahead with preparations for an initial public offering later this year. The statement said Rosneft's stake in the unit had been increased from 50 percent to 76.79 percent as of March 31. A company official said the additional 26.79 percent stake in Yugansk had been transferred to Rosneft's balance sheet from Baikal Finance Group, the opaque shell company used to purchase the production unit and sidestep legal risks in a disputed government auction in December 2004. The official, who was speaking on condition of anonymity because of the sensitivity of the situation, declined to comment on why the Yugansk shares had remained on the balance sheet of Baikal Finance Group, which is registered in the same building as a grocery store in the city of Tver. He declined to say whether any money had changed hands in the latest transaction. Rosneft bought 100 percent of Baikal Finance Group when it took over Yugansk following the disputed auction. Analysts said the share transaction looked like a technical move to simplify the company's structure ahead of its IPO this year. Rosneft's acquisition of Yugansk more than tripled its output to nearly 1.5 million barrels per day, making it the world's No. 8 oil producer and, according to Rosneft, No. 2 in terms of reserves. The acquisition, however, also opened Rosneft to legal attack from Yukos shareholders, who have claimed in a lawsuit filed in the United States that Rosneft and Baikal Finance Group were part of a conspiracy to expropriate Yugansk. Yukos still owns a minority 23 percent stake in Yugansk, which could pose problems for a full consolidation of Rosneft's subsidiaries ahead of the IPO. Yukos, however, is now facing bankruptcy and possible liquidation after Rosneft, a major creditor, filed to bankrupt it last month.