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Putin has said he wants to encourage Western investment in Russia and has no intention of destroying Yukos. Russian officials say the back-taxes claim is based on an official audit.
But Big Oil is also facing renewed Kremlin oversight of oil and gas production. After a period of privatization and deregulation in the 1990s, oil-industry specialists say, the pendulum has swung the other way. That doesn't mean the central government wants to nationalize all energy assets, but it has put an end to generous tax breaks and has introduced other limitations on the private sector, particularly foreign companies. Under the terms of the Conoco deal, for example, the American company can raise its stake in Lukoil--but only to a ceiling of 20%. That's less than the 25% it needs to be able to block strategic company decisions. BP, by contrast, whose contract was signed eight months before Khodorkovsky's arrest, has a 50% share in its Russian joint venture. (The company's Russian minority shareholders are howling because BP uses a complicated transfer-pricing method that allows the parent company, instead of subsidiaries, to book the lion's share of profits.) "That's a deal we won't see repeated," says Jonathan Stern of the Oxford Institute for Energy Studies. "The climate now is for strategic minority investments by foreign companies in Russian energy." Says William F. Browder, president of Hermitage Capital, an investment group based in Moscow: "For foreigners, the opportunities are dwindling very quickly."
Big Russian firms are stepping in where foreign companies find it harder to tread. Foremost among them is the giant state-controlled Gazprom, whose gas reserves were recently valued at $78 billion and which is actively pushing to become a big player in the oil market. It is merging with Russia's seventh largest oil company, state-owned Rosneft, and Alexei Miller, Gazprom's chief executive, has signaled his interest in another oil producer, Zarubezhneft. Most dramatically, Gazprom has emerged as the best-positioned candidate to acquire the company that forms the core of Yukos--a Siberia-based corporation called Yugansk Oil & Gas--if the government auctions it off. Yukos says a forced sale of Yugansk, which reportedly may be priced way below market value, would violate Russian statutes that stipulate that noncore assets be sold first in the event of tax claims. "This has nothing to do with taxes and everything to do with expropriation," argues Robert Amsterdam, a Toronto-based lawyer for Khodorkovsky.