Gulf state offers bid for Russia's Lukos oil firm

Wednesday, August 11, 2004

MOSCOW The United Arab Emirates has staged a quiet campaign to buy Russia's leading energy firm.

Russian industry sources and media said UAE Defense Minister Mohammed Bin Rashid Al Maktoum was said to have offered up to $12 billion to purchase Russia's Lukas. They said Al Maktoum, who is also Dubai's crown prince, was prepared to pay off the estimated $3.4 billion in taxes owed by Yukos and purchase a majority stake in the company, which has interests in Iraq and Saudi Arabia.

Al Maktoum was believed to be the silent partner of Konstantin Kagalovsky, a former associate of Mikhail Khodorkovsky, Yukos's largest shareholder. But Kagalovsky would not confirm a report by the London-based Sunday Times on Aug. 8 that Al Maktoum was the silent partner.

"I cannot name the members of the consortium," Kagalovsky told the Moscow-based Kommersant newspaper. "But I can confirm that investors from Persian Gulf countries plan to offer more than half of the required funds. The exact amount is not known, given that the tax payment demanded from Yukos has not been determined."

The UAE has the largest amount of foreign assets by an Arab League state and increased holdings by $10 billion over the last year, Middle East Newsline reported, citing a government report.

Copyright 2004 East West Services, Inc.

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