Russia & CIS Business and Financial Newswire, 8 May 2008

Eni and Enel intend to put LLC Northern Energy in charge of the former Yukos assets OJSC Arcticgas, CJSC Urengoil Inc and OJSC Neftegaztekhnologiya that the Italian companies bought at an auction a year ago.

The Russian Federal Antimonopoly Service (FAS) said that LLC Northern Energy had applied for clearance to allow it to run the assets.

The FAS extended its review of the request by two months, until the end of July.

Eni and Enel formed the joint venture EniNeftegaz to bid at the auction for the bankrupt Yukos's assets.

RusData Dialine, 7 May 2008

Russneft, which has been left ownerless after its sole owner, Mikhail Gutseriyev, who fled the country, is threatened with bankruptcy. If it is declared bankrupt, it will be sold out in portions, like Yukos.

However, experts think the government is not interested in liquidating Russneft, because it would have to annul its licenses. The best approach would be to allow a company loyal to the Kremlin to buy Russneft.

According to the results of inspections of Russneft's activities in 2006, tax agencies' additional claims to the company may reach RUR 18-20 billion (over USD 840 million).

"Russneft will not be able to repay extra tax claims, which will actually result in its bankruptcy," a source familiar with the data of the Federal Tax Service said. If this is true and the company is to make additional tax payments, it will be unable to do so. Russneft has already lodged a complaint with the Supreme Arbitration Court against the extra tax of about RUR 20 billion for 2003-2005. The company also has big debts to Sberbank (USD 1 billion) and Switzerland's Glencore (USD 874.95 million), as well as a ruble debt amounting to 32.58 billion. Russneft is to repay its debts by the end of 2011.

If the company is bankrupted, it will repeat Yukos' destiny. "Russneft's main creditor is the state and it will be in charge of the bankruptcy procedure," said Alexander Razuvayev, head of Sobinbank's market analysis department. "It is quite possible that Russneft will be given to a state- controlled company".

At the same time, the liquidation of Russneft as a legal entity may have serious negative consequences. A market expert explains that "the company's assets and property will be given a new owner, but this is nothing without Russneft's licenses. With the company's liquidation, its license agreements will be annulled, and the new owners will have to pay a lot in order to restore them".

The expert believes that the government's most probable decision will be to avoid Russneft's bankruptcy and allow a company loyal to the Kremlin to buy it. "This may be Deripaska's company, or Rosneft," he said.

In his opinion, "the government is unlikely to recover more than RUR 3-4 billion in tax claims, but "this scenario will help to avoid many problems, including license problems".