Yukos - History

History

The company was created on April 15, 1993 by Resolution №. 354 of the Russian government and consisted of the following enterprises: a Western Siberian oil extraction enterprise Yuganskneftegaz and oil refineries in Samara Oblast: Novokuybyshevsk NPZ, Kuybyshev NPZ and Syzran NPZ (NPZ stands for NeftePererabatyvayushchy Zavod, literally "petroleum processing plant"). In 1995, decree №. 864 of the Russian government added Samaraneftegaz to Yukos.

Its Russian abbreviation ЮКОС comes from the names of the main entities that initially comprised the company: Юганскнефтегаз (Yuganskneftegaz: Nefteyugansk + petroleum + gas) and КуйбышевнефтеОргСинтез (Kuybyshevnefteorgsintez: Kuybyshev + petroleum + organical synthesis).

Yukos was one of the world's largest non-state oil companies, producing 20% of Russian oil—about 2% of world production. Its assets were acquired in controversial circumstances from the Russian Government during the privatization process of the early 1990s. The initial period of "oligarchic privatization" was characterized by bloodshed, and Yukos was certainly no exception. Alexei Pichugin, the former Security Chief of Yukos, has been convicted on multiple counts of murder and attempted murder, and is now under investigation along with Yukos partner Nevzlin for the shooting death of Vladimir Petukhov, the mayor of the Yugansk oil province and a vehement opponent of Yukos, on Khodorkovsky's birthday in 1998. Lawyers for Pichugin and Nevzlin, who lives in self-imposed exile in Israel, say that both the charges and the new investigation are politically motivated.

In 1996 the majority of Yukos shares (90%) were bought by Group Menatep in a series of auctions. At the time Yukos, as most other Russian energy companies, was badly affected by the economic recession in the 1990s. After privatisation Yukos started recovering very quickly and in the course of several years became one of Russia’s largest oil companies and a leader in corporate governance reform .

In April 2003, Yukos agreed to a merger with Sibneft, but the merger was soon undone in the aftermath of the arrest of Yukos CEO Khodorkovsky in October, 2003.

In December 2003, a tax re-audit was conducted by the Russian tax authorities, after which Yukos was issued with tax claims that exceeded its revenues for 2002 and 2003. At the same time, Yukos's assets were frozen by the government. In December 2004, its core asset, Yuganskneftegaz, was sold in an auction to an unknown company called Baikalfinansgrup, which was later bought by state oil company Rosneft. Eventually, Yukos was bankrupted in 2006 and liquidated in 2007.