Moscow - The steady climb in world oil prices has been propelled not just by global terrorism concerns and the conflict in Iraq, but also a dramatic arrest made deep in Siberia one year ago.
On October 25, 2003, state security officers in Novosibirsk detained Mikhail Khodorkovsky, CEO of Russia's largest oil-exporting company Yukos.
Today, a struggle continues behind the scenes for control of Russia's oil reserves, while its richest man sits in a Moscow jail cell during his trial for tax evasion, fraud, embezzlement and "forming a criminal gang". The charges carry a sentence of up to ten years.
Alternatingly rated the largest oil company in Russia with Lukoil, and accounting for one fifth of national production, Yukos was becoming too independently-minded for the Kremlin's liking.
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So when Khodorkovsky in autumn 2003 toyed with the idea of selling it to US multinationals, the Kremlin put its foot down hard. And what critics saw as "selective application of Russian justice" against Yukos and Khodorkovsky came at the expense of international confidence in the Russian authorities.
Oil prices have been pushed up in recent months amid periodic demands for billions of dollars from Yukos in back taxes and fines, moves to compulsorily sell off its key assets to cover the debts, and Yukos' own claims that it can no longer ensure exports to China.
Meanwhile, analysts contest government assurances that the upheavals around the company will not affect production.
"Under normal conditions Yukos would have produced much more oil and Russia could have made a significant contribution to the stabilisation of international oil prices," said Valery Nesterov of the Troika Dialog investment company.
Once touted as an emerging model for corporate business in Russia, the company's demise is now occurring in painful instalments.
After its accounts were frozen in August, Yukos said it would "soon" be forced into insolvency. Possible rescue scenarios fell apart as the government rejected any compromise, and Yukos stock value began its spiralling descent. But still the company operates.
However, the inevitable death blow is scheduled for late November when its core production unit Yuganskneftegaz undergoes compulsory sale, effectively breaking up the oil major.
The current favourite to buy the subsidiary is the semi-state- owned Gazprom gas monopolist, which has started to make sizeable acquisitions in the oil sector.
To those in the industry, this comes as no great surprise: the Yukos case sends a strong signal that the state will gradually re- establish its control over the country's strategic raw materials. Foreign investments are still welcome in the sector, but only in minority stakes.
Regardless of the Yukos crisis, the US oil major ConocoPhillips in September paid almost $2-billion for a seven percent stake in Yukos competitor Lukoil. - Sapa-dpa
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