Russia’s Yukos gets new boss
A Russian-born American with vast experience in the oil sector has been named to replace Mikhail Khodorkovsky as head of embattled natural resources giant Yukos.
Simon Kukes is a 56-year-old Muscovite who emigrated from the Soviet Union in 1977 and moved to Texas in the United States.
He completed a post-doctoral degree at Rice University in Houston and during the 1980s worked as technical director for the US oil groups Phillips Petroleum and Amoco.
After the disintegration of the Soviet Union, Kukes worked as an Amoco vice president in charge of downstream business development in the countries of the Commonwealth of Independent States, a union that loosely links most of the former Soviet republics.
Home coming
Returning to Russia in 1996, he joined Yukos to work on the newly formed company’s planning and development.
He left Yukos in 1998 to become chairman and chief executive officer of another Russian oil company, TNK.
Kukes told a reporter that year that he chose to work in the nascent Russian private oil industry because “the work is interesting — every day there is a new challenge.”
At TNK, he helped engineer a merger with Britain’s BP, which was formally launched in September and represents the largest foreign direct investment into Russia.
The British oil giant has pledged to invest a total of $7.7 billion for its 50% stake in TNK.
The deal was seen as an act of faith for BP, which got its fingers burned in a 1998 oil investment that put it in the middle of a feud between several Russian companies, including TNK.
Return to Yukos
Earlier this year Kukes returned to Yukos, currently Russia’s largest oil producer and widely seen by analysts as the most transparent and best-governed.
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As an American citizen, Kukes may |
It has a market capitalization of some $30 billion.
Kukes will head the board of YukosSibneft, a company that was created when Yukos merged with a smaller rival Sibneft earlier this year.
The merger, due to be finalized at a shareholders’ meeting in late November, would create the world’s fourth-largest oil and natural gas producer.
Kukes’s appointment came a day after Khodorkovsky quit as Yukos chief executive from his jail cell.
Political considerations
Khodorkovsky – Russia’s richest man – was arrested on 25 October on charges of massive fraud, tax evasion and embezzlement while prosecutors continue their investigation of him and Yukos.
The investigation against Khodorkovsky and the oil company is popularly seen in Russia as a political reprisal for the oil tycoon’s funding of opposition political parties ahead of a December parliamentary poll.
His resignation announcement sent the Yukos share price sharply higher as investors hoped Russia’s largest oil producer would now be left alone.
Analysts said that Kukes was named Khodorkovsky’s replacement in part because of his US citizenship, as that would make it more difficult for prosecutors to pursue investigations against him.
His success with the TNK-BP merger also helped position him for the top job at Yukos, which has reportedly been involved in talks on selling a major stake to a global oil company, reportedly ExxonMobil or ChevronTexaco, analysts said.