December 24, 2004

Putin backs Russia’s Yukos grab

by brian_turner

Ending speculation that the Russian state had simply circumvented international restrictions, Russia’s President Vladamir Putin defended the acquisition of Yukos’s key production unit by Rosneft, via Baikal finance, claiming that it followed “free market principles”.

As reported in Kremlin plays dirty for Yukos?, Russia’s state owned fuel giant, Gazprom were legally prevented from buying up Yuganskneftegas, despite being favourites – and instead a completely unknown company, Baikal Finance, suddenly appeared on the scene and won a bid for the production unit.

Baikal was then bought out by Rosneft – which is itself already in the process of being merged with Gazprom – thus ensuring acquisition despites international obstacles.

According to the BBC report, Putin backs state grab for Yukos:

The US, meanwhile, has said a lack of transparency in the sale of Yukos’ Yuganskneftegas subsidiary could affect Russia’s standing in the world economy.

“We think this sends the wrong signals to foreign investors and could negatively impact Russia’s role in the global economy,” deputy State Department spokesman Adam Ereli said.

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