Asset hunt from Venezuela to Vietnam

Published Aug 1, 2014

Share

Armed with a record $50 billion (R531bn) ruling against Russia for confiscating Yukos, the former owners of the defunct oil firm are targeting assets of state-run Rosneft and Gazprom in a legal race that may run from Venezuela to Vietnam.

The 600-page judgment by an arbitration panel in The Hague this week found Rosneft, which acquired most of Yukos’s assets after they were seized and sold, and Gazprom to be instrumental in the campaign. Backed by such a ruling, former Yukos shareholders stood a better chance of winning court-ordered seizures of assets of Russia’s two largest firms than of sovereign property, which was usually immune to confiscation, arbitration expert Gus Van Harten said.

“If I were them, I’d be looking at Rosneft: who are the customers, where are they paying, where is the oil being shipped?” Van Harten said.

Rosneft went from Russia’s 10th-largest crude producer to the world’s top publicly traded oil firm by output, aided by its acquisition of Yukos assets. The firm’s head is Igor Sechin, an ally of President Vladimir Putin who was deputy head of the Kremlin administration during the legal assault on Yukos.

Rosneft’s biggest European asset is Ruhr Oel, a 50-50 venture with BP that unites four German refineries, energy analyst Alexander Kornilov said. It also has major projects in Venezuela and a gas field and pipeline in Vietnam.

The tribunal in The Hague said Rosneft in particular had implemented the government’s policy in its takeover of Yukos. The court accepted the plaintiffs’ argument that the $27bn in tax claims used to justify the dismantlement was “for the sole benefit of the Russian state and state-owned companies Rosneft and Gazprom.”

The Yukos affair “could easily go on for another 10 years”, said Dmitry Gololobov, a former attorney for the defunct firm.

“It will be difficult, probably impossible, to seize Rosneft and Gazprom assets to satisfy The Hague award,” attorney Kyle Davis said. – Bloomberg

Related Topics: