Russian bank denies financing Yukos take-over

03 Feb, 2005

Russian bank Vnesheconombank denied on Wednesday having played a role in financing the state's acquisition of the main asset owned by Russian oil giant Yukos but confirmed it had arranged a Chinese credit line secured against future oil supplies. State-owned oil firm Rosneft, the buyer of the core Yukos asset, recently secured a credit line of six billion dollars (4.6 billion euros) from Chinese banks using Vnesheconombank as an intermediary in return for guaranteed oil deliveries to China's state oil firm CNPC, it emerged Tuesday.
Shedding light on the financing of the mystery take-over of Yuganskneftegaz, Finance Minister Alexei Kudrin told reporters that Chinese banks had lent Vnesheconombank six billion dollars to enable it in turn to provide financing to Rosneft.
The state Russian bank in a statement said that it had indeed arranged a loan for that sum from a syndicate of Chinese banks to finance "long-term and stable Russian oil supplies to China."
However, Vnesheconombank insisted that linking the credit it facilitated for Rosneft to the latter's purchase of Yugansk was "unfounded and does not correspond to reality".
The statement said: "Vnesheconombank did not participate in the acquisition of Yuganskneftegaz shares and was not asked to do so."
Vnesheconombank would shield itself from Yukos lawsuits it did not finance Rosneft's purchase of the Yukos subsidiary but only issued a loan to Rosneft - in the name of oil purchases - that Rosneft later decided to use on the key Yukos stake purchase.
The Russian finance ministry also issued its own statement denying any connection between the multi-billion-dollar loan and the Yugansk take-over.
Rosneft, a mid-sized state oil firm, swallowed up Yukos's main production arm - with an output more than twice its own - after a controversial December auction, leaving market watchers wondering how it afford the 9.35-billion-dollar (7.2-billion-euro) sale price.
Completing the pieces of the jigsaw puzzle, federal energy agency chief Sergei Oganesyan said on Tuesday that Chinese state-owned oil and gas giant China National Petroleum Corporation had agreed to provide a six-billion-dollar credit for a long-term oil supply contract with Rosneft.
Top Russian officials, during a secretive visit to China in January, signed a preliminary agreement for Russia to ship 48.4 million tonnes of oil to CNPC by 2010, according to business daily Vedomosti.
The main shareholders in Yukos immediately threatened Tuesday to sue Vnesheconombank and the Chinese banks for facilitating the sale of Yugansk in defiance of a US bankruptcy court ruling in Houston, Texas.
CNPC had reportedly been offered a 20-percent stake in Yugansk in return for providing cash for the purchase. But China, the world's second-largest oil consumer which is keen to reduce its reliance on the Middle East, preferred oil supplies, perhaps fearful of litigation by Yukos.

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