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Mon, Nov 01, 2004 - Page 12 News List

Chinese oil giant sues Yukos over export contracts


China's state-owned oil conglomerate has filed a lawsuit seeking compensation from troubled Russian oil company Yukos for failing to fulfill its export contracts, state media said yesterday.

The China National Petroleum Corporation (CNPC) said it has sued the Russian oil giant for not resuming oil shipments which were suspended in September by Oct. 20 as promised, the Beijing Youth Daily said.

The move followed repeated unsuccessful pleas by CNPC and a lack of indications from Yukos that it planned to honor its agreement, the paper quoted an unidentified CNPC official as saying.

"The lawsuit against Yukos completely conforms with commercial procedures because Yukos breached the contract, so the CNPC's filing of a lawsuit and its request for compensation are reasonable," the official said.

The report did not reveal the amount of compensation sought or when the lawsuit was filed.

Yukos had agreed to export 3.5 million tonnes of crude oil to CNPC this year, but so far only 2.58 million tonnes have been supplied, CNPC said.

Yukos, which has been locked in a year-long battle with the Russian government over payment of back taxes, had said it was no longer able to finance transport and other export costs.

The Russian government had promised that other Russian companies would maintain oil exports to China, but several major oil companies have refused to pick up the slack. China has said a "temporary suspension" in Russian exports would not have an impact on domestic oil supply.

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