EniNeftegaz, the joint venture company of Italian energy companies Eni and Enel, has won the second lot of Yukos assets auctioned off by the Kremlin to repay the bankrupt Russian oil company’s debts. The assets were acquired for $5.83 billion. Eni SpA, Italy’s largest energy company won the second round of Yukos bankruptcy auction to gain a foothold in Russia after agreeing to share the assets with state- run OAO Gazprom. This auction also marked that the first time foreign firms have purchased assets of OAO Yukos at a series of controversial auctions with a view to liquidate the company, which was driven into bankruptcy after it was hit by billions of dollars in back-tax bills.
The auction, which has been largely perceived as just eyewash, underscored the fact that how difficult it is to get a foothold in the Russian energy sector, the glaring example is the ongoing auction for the assets of bankrupt oil company Yukos. BP’s Russian subsidiary, TNK-BP, was recently allegedly forced drop out of the first round leaving state-controlled Rosneft to gain the treasure.
Then two Italian energy giants, Eni and Enel, bid $5.8 billion for a 20 percent stake in Gazpromneft, plus three smaller oil and gas companies. However, contrasting TNK-BP, they actually won but they promptly announced they would sell most of the assets to the state-owned Russian gas giant Gazprom soon after winning the bid to bolster the Kremlin’s control of energy sector. The deal will eventually increase Kremlin control over the nation’s strategic oil and natural-gas sector.
Shortly before the auction for the assets began, OAO Gazprom, the state-controlled Russian energy giant, made a deal with buyers Eni SpA and utility Enel SpA to buy either all of or majority stakes in the assets they were about to acquire. The deal shows how desperate Western energy companies are for greater access to the country’s vast oil and gas resources.
Putin’s government began dismantling Yukos in 2003, after imprisoning former Chief Executive Officer Mikhail Khodorkovsky on fraud charges and claiming billions of dollars in back taxes from the company.
Speaking over the development, Paolo Scaroni, CEO of Eni, has said, ‘This transaction is a major step forward in Eni’s strategy of securing reserves in the world’s leading hydrocarbon producing countries...This transaction, which is in the context of a fruitful ongoing relationship between Italy and Russia, underlines the value of our strategic partnership with Gazprom.’
