Anybody for more YUKOS news?

It appears now that there was a merger deal underway between Sibneft and Yukos which has been suspended. The news has caused YUKOS' shares to drop dramatically, and it's reported that there will be a global reaction in the energy market come Monday morning. (A little background is here in a previous post.)

I don't pretend to understand the current connection, but the Russian government at one time held shares in Sibneft. It is obvious from reading the Sibneft web information and from the meetings between Putin and a major shareholder in the oil company which precipitated the suspension of the merger that there is a close relationship between Sibneft and the Russian government, or merely Sibneft and Putin himself.

That "substantial" shareholder in Sibneft apprently met with Vladimir Putin a few days before vetoing the merger. Looks like Vlad may have had more in mind than just cracking down on business crime when he arrested YUKOS CEO Mikhail Khodorkovsky. On the other hand, the handover of YUKOS to an Americanized Russian and his American assistants may have made it seem necessary to knock YUKOS back. There had been talk of a deal between YUKOS and Exxon Mobil before Khodorkovsky's arrest.

It's undoubtedly not that simple.

It seems that Sibneft wanted to name the merged company's CEO, an idea that was not approved of by YUKOS. Apparently there was a merger agreement in April that was assumed all but finalized, and now YUKOS is demanding a formalized written statement from Sibneft regarding the termination of the agreement. It's also interesting to note that there was another failed attempt at a merger in 1998 over "differences in strategy" (Sibneft website).

According to one article,

One individual close to Yukos indicated that if they failed to receive a letter from Sibneft formalising the end of merger talks, they were likely to seek independent arbitration which may end up in the London courts. It would not be a "quiet divorce", he said.

One individual with knowledge of both companies said on Sunday he believed the collapse of the merger - and the removal of Mr Abramovich as a powerful patron - could ultimately trigger the dismemberment of Yukos, through tax evasion charges of up to $10bn and the removal of its oil production licences.

And this is a Forbes lead:

MOSCOW, Nov 30 (Reuters) - Russian oil company Sibneft may have most to gain if it bails out of a sputtering $11 billion-merger, but its scorned partner YUKOS would be left in dire straits, analysts said on Sunday.

I'd say that was not an idea that wasn't considered by Putin. More and more, it seems to me that there was a good threat of American control over Russia's oil, and Putin has thrown up a block. I could be way off base on that, because there are some analysts saying that Sibneft could sell out to Exxon Mobil. We'll just have to wait and see. If it does, then I'll have to change my views of what Putin's been up to all along. That eventuality would make it less likely that he's protecting the country and more likely that he's lining his own pockets.

And this little paragraph on the Sibneft website makes me wonder even more:

The element of competition that Sibneft introduced for its own oilfield service affiliates is similarly applied to its international contractors, even its strategic partner Schlumberger. In addition to Schlumberger, Sibneft also works with Halliburton, Baker Hughes, BJ Services and other international oilfield service companies.

I suppose "working with" Halliburton is not necessarily "partnering" with Halliburton, but you know that name sends up red flags. And, the very next statement is this:

An interesting example of how Russian and Western contractors competed on a level playing field, and the Russian company won, was in a tender for the pilot development of the Sugmut field.

This is why I'm not involved in high finance and political intrigue. I have no more grasp of the finer points of the game than Georgie Double-dumb Bush.

In the end, I suppose I wouldn't be surprised to find Putin in the same elitist den of thieves as the Bush gang - just disappointed.

Stay tuned.

....but hey, do what you want....you will anyway.