Foreign Correspondence

[CoalTrain]

Yukos to Halt Crude Supplies

Is a re-test of the recent high in oil coming?

MOSCOW - The board of Russia's embattled oil giant Yukos will halt crude supplies to Baltic refinery Mazeikiu Nafta until the end of the year, the Interfax agency reported Monday — just hours after Yukos confirmed a similar move involving a Chinese company.


Yukos spokesmen could not immediately be contacted for comment on the report. The Mazeikiu Nafta refinery is located in Lithuania.


The cash-strapped company is fighting to pay off some $7 billion in back taxes for 2000 and 2001, and has repeatedly warned that bankruptcy or a production stoppage are imminent. Most of its bank accounts and assets have been frozen by the Russian government.


Earlier on Monday, Yukos confirmed it was halting rail shipments to China National Petroleum Corp., a move which would reduce its exports by 100,000 barrels per day.


The company denied allegations its decision to halt shipments to CNPC was politically motivated, but analysts noted the decision coincides with a planned visit by China's prime minister starting Wednesday. Dow Jones Newswires reported that CNPC was in negotiations with Yukos to restart the flow, though Yukos would not confirm that.


The complex web of legal cases against Yukos and its jailed owner billionaire Mikhail Khodorkovsky is seen as politically motivated punishment for Khodorkovsky's perceived political ambitions. The Kremlin has consistently cast the affair as a clampdown on shady business practices.


On Monday, U.S.-traded PetroChina shares rose 35 cents to close at $52.60 on the New York Stock Exchange (news - web sites).



http://news.yahoo.com/news?tmpl=story&u=/ap/20040920/ap_on_bi_ge/russia_oil_fight_5