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New head of Yukos casts doubt on possible merger

Newly appointed Yukos oil chief executive Simon Kukes sees no need to join forces with a major Western oil company, casting doubt on the outcome of reported negotiations with Exxon Mobil Corp and ChevronTexaco Corp to buy a large stake in Yukos.

Kukes outlined priorities for Russia's largest oil company Thursday, including significant areas of divergence from his predecessor, arrested billionaire Mikhail Khodorkovsky.

Foreign oil companies can't offer Yukos any strategic advantages that it doesn't already have, Kukes said. Yukos has state-of-the-art technologies, low capital costs and marketing capabilities, and doesn't need those from a foreign firm, Kukes said in an interview with the Wall Street Journal and Dow Jones Newswires.

"Right now, it doesn't strike me like it's a super deal," he said, adding he will study whether Yukos should seek a large Western partner.

In another change of tactics, Kukes said it's immaterial whether an oil pipeline is built to China or to the Arctic seaport of Murmansk, but it must be decided quickly to ensure that growing Russia production can reach international markets.

Yukos will produce nearly 3 million barrels of oil per day by the end of next year, but the company will face constraints in exporting crude oil to Asia or the West if another pipeline isn't built soon, Kukes said.

The new chief executive expressed a preference for a government-run pipeline project, unlike Khodorkovsky, who backed a private consortium plan to build a pipeline to Murmansk.

Additional investment in natural gas production projects wouldn't be wise until new pipeline capacity is in place, he added.

Kukes, who served as Yukos' chairman before his appointment this week as chief executive, tried to distance the company from Khodorkovsky's legal troubles.
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