US embassy cable - 04BRATISLAVA1014

UNCLAS BRATISLAVA 001014 
 
SIPDIS 
 
 
TREASURY FOR ERIC MEYER AND BRIAN COX 
USDOC FOR 4232/ITA/MAC/EUR/JBURGESS AND MWILSON 
USDOE FOR IA-42 ROBERT PRICE 
 
E.O. 12958: N/A 
TAGS: ENRG, EPET, LO, PREL 
SUBJECT: SLOVAKS SEEK TO REPURCHASE TRANSPETROL FROM YUKOS 
 
REF: WARSAW 04253 
 
 1.  Summary.  Three years after selling Transpetrol, the 
operator of the Slovak portion of the Druzhba pipeline, to 
Yukos, the GOS will attempt to repurchase the company. 
Citing instability at Yukos due to its legal problems with 
the GOR, Slovak Minister of Economy Pavol Rusko announced 
that the GOS had sent a letter to Russian officials 
expressing interest in repurchasing the company.  The GOS 
would probably resell Transpetrol to another strategic 
investor.  What this development could mean for the future of 
the Odessa-Brody pipeline is still unclear.  End summary. 
 
2.  The Slovak press agency SITA reported that, at a November 
8 conference, Rusko announced the GOS's efforts to repurchase 
Transpetrol.  He added that he expected that the GOR would be 
interested in selling the company.  Rusko explained that 
Yukos' planned extraordinary shareholders meeting on December 
20 could lead to a decision to liquidate the company or send 
it into bankruptcy.  He added that "we consider the situation 
a Yukos to be serious, thus our partnership is unstable. 
Slovakia will do everything possible to get back ownership of 
Transpetrol."  He outlined a plan to conclude negotiations 
with the GOR within three months and complete the sale by the 
end of 2005. 
 
3.  The GOS sold 49 percent of Transpetrol, plus management 
rights, to Yukos in January 2002 for approximately USD 74 
million.  Rusko said he thought a possible repurchase price 
would be roughly the same, and added that the GOS has the 
money available to cover it.  He said the GOS would likely 
resell the company to another strategic investor and noted 
that he already had a list of potential buyers, although he 
failed to elaborate.  Rusko said another possibility is that 
the GOS would simply act as an agent for the GOR in directly 
selling Transpetrol from Yukos to a new buyer. 
 
4.  Comment.  Recently, Rusko has used the media to express 
what many feel are exaggerated opinions on business-related 
subjects.  However, if ownership of Transpetrol were to 
change hands it could possibly affect to moribund 
Odessa-Brody pipeline project designed to carry Caspian oil 
to central European markets by opening up the Slovak portion 
of the Druzhba pipeline to carry oil the final distance 
across Slovak territory.  Post will follow up with the 
Ministry of Economy and report on developments. 
WEISER 
 
 
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