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from.– Oil Crisis...is
the world about to be shocked
Yukos suspends
China oil exports, prices may rise
New Zealand Hearald
MOSCOW - Russian oil major YUKOS suspended most of its oil exports by
rail to China on Sunday in the first sign of supply disruptions due to
its financial difficulties which could push rising world prices still
higher.
A YUKOS spokesman said the board had decided last week to suspend all
deliveries to the China National Petroleum Company (CNPC), representing
some 400,000 tonnes per month, or 100,000 barrels per day.
"But supplies to Sinopec, representing about 200,000 tonnes per month,
are continuing so far," the spokesman said, referring to Asia's largest
oil refiner.
The spokesman said the cut was due to "problems we are facing in paying
our export duties and railway fees because our bank accounts are
frozen".
YUKOS is Russia's largest exporter, sending around a million barrels per
day to Western markets and China.
The company has repeatedly said it may be forced to cut production and
exports after bailiffs froze its bank accounts as part of efforts to
recover more than $7 billion in back taxes from the company for 2000/01.
Sergei Suvyerov, head of analysts at Bank Zenit, said the measure was
not unexpected. Future cuts in supplies to Europe could also not be
ruled out.
"One of the reasons behind the move may be a YUKOS appeal to the
international community so that the Chinese government puts pressure on
Russia in order to ensure that supplies are uninterrupted," he said.
"I believe prices will rise from tomorrow morning."
Ivan Mazalov, director of Prosperity Capital Management, which helps
manage US$600 million ($919.96m) of Russian stocks, agreed.
"Prices are certain to rise tomorrow, judging by previous announcements
by YUKOS," he said.
China, with rising energy consumption, has been counting on Russia,
especially on YUKOS, as an alternative source of crude to cut dependence
on supplies from the volatile Middle East. YUKOS had planned to boost
exports to 300,000 bpd by 2006.
YUKOS' tax troubles are part of a broader campaign seen by analysts as
orchestrated by the Kremlin to punish its founder, Mikhail Khodorkovsky,
for political activities.
Khodorkovsky, one of Russia's wealthiest men, was arrested last October
and is on trial on fraud and tax evasion charges.
Oil prices have been rising in the past two months partly due to
concerns over supply disruptions from Russia linked to YUKOS's problems.
But analysts have said the Kremlin will refrain from upsetting YUKOS'
export operations to avoid blame for adding to already substantial
increases in oil prices.
President Vladimir Putin has said in recent weeks that Russian oil
companies would continue to increase production and exports, and
visiting French Finance Minister Nicolas Sarkozy said last week Russian
officials had made a similar pledge.
YUKOS says rail supplies to China are far more expensive than pipeline
exports to Europe and cost US$160 to US$180 per tonne.
YUKOS' biggest concern is prepaying its transportation fees for October
to Russia's pipelines monopoly Transneft, which ships around 600,000 bpd
of the company's crude to the West.
A YUKOS spokesman declined to comment, saying everything would be done
to find the money to prepay key export routes.
On Friday, YUKOS Chief Financial Officer Bruce Misamore put monthly
revenue at about US$2 billion, half of which was immediately seized by
bailiffs for payment of the back tax bill.
Current taxes and fees accounted for the remaining US$1b and YUKOS had
therefore decided not to pay the current mineral extraction tax to focus
on prepaying export activity.
- REUTERS
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