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Wed, Nov 05, 2003 - Page 12 News List

Appointment of new Yukos CEO reassures investors


The appointment Simon Kukes, a US citizen, to run Russian oil giant Yukos has reassured investors the company will be run effectively after jailed CEO Mikhail Khodor-kovsky resigned as on Monday.

The new team is due to speak to the press in Moscow later in the day.

Analysts doubt that the move will lay to rest a confrontation between Khodorkovsky and the Kremlin and fear that the company may suffer in the medium term from the loss of Khodorkovsky's drive and strategic vision.

"The appointment of Kukes as company CEO is positive above all from the point of view of the company's integrity and good management," said Valery Nesterov, an oil and gas analyst at Troika Dialog.

"We know he is an experienced oil man and a top level manager and I am confident that as the new CEO he will live up to expectations. It is good for the company," he added.

Yukos shares were down 2.86 percent on the rouble denominated MICEX exchange at 380 roubles in early trading on Tuesday after soaring more than 12 percent on Monday following Khodorkovsky's resignation.

The Russian-born Kukes -- formerly head of TNK, a Russian oil firm now part of a joint-venture with BP -- will head a seven-member executive committee which will run the group.

Two other key figures in the team are Americans, including Steven Theede, who is Executive Director of Yukos-Moscow, the management company for the group and effective number two in the company's hierarchy.

Bruce Mysamore, another American, is the group's chief financial officer.

Yuri Beilin, head of Yukos' Exploration and Production operations, is also on the committee as well as Mikhail Brudno, who runs Refining and Marketing operations.

"Rumors that Kukes would get the job were already circulating yesterday and were probably already priced in," Nesterov added.

Others said the departure of Khodorkovsky, arrested 10 days ago and charged with fraud and tax evasion, would weaken the company in the longer term because he was the driving force behind its breakneck expansion.

The judicial assault on Khodorkovsky and his associates is widely seen as being driven by Kremlin hardliners who want to snuff out his thinly disguised political ambitions.

"His departure from a strategic point of view is going to be negative in the long term. He gave strategic vision and leadership," said Stephen Dashevsky, oil analyst at Moscow-based Aton brokerage.

"Kukes is a good interim operations boss," he said.

He also doubted whether Khodorkovsky's departure would be enough to bring an end to his judicial woes.

"This management reshuffle does not address what got Khodorkovsky into his current situation," said Dashevsky.

"He still has political designs and US$6 billion plus regular dividend income to finance those ambitions," said an analyst who asked not to be identified.

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