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C O N F I D E N T I A L SECTION 01 OF 02 BRATISLAVA 000816 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 10/06/2016 
TAGS: ENGR ECON EPET PREL PGOV LO RS
SUBJECT: SLOVAKIA PURSUES TRANSPETROL THROUGH MURKY LEGAL 
WATERS 
 
REF: BRATISLAVA 720 AND PREVIOUS 
 
Classified By: Ambassador Rodolphe M. Vallee for reasons 1.4 b) and d) 
 
¶1. (C) Summary - Slovakia's efforts to repurchase the 49 
percent stake in Transpetrol have been hampered by legal 
uncertainties surrounding ownership and the right to sell the 
shares.  Economy Minister Jahnatek has repeatedly tried to 
meet with Eduard Rebgun, the Yukos Oil receiver who was 
nominally given the reigns of Yukos Finance in August and has 
subsequently tried to gain full control of both Yukos Dutch 
entities. A September 21 Dutch court decision cast doubt on 
Rebgun's legitimacy to control Yukos Finance, thereby 
creating an opening for the GOS to pursue other strategies. 
The Transpetrol deal is being closely watched throughout the 
region, especially by Russian interests who believe 
Gazpromneft offers the best possibilities for future 
development of the pipeline.  End Summary. 
 
GOS STICKS TO STRATEGY AND BUILDS SUPPORT 
----------------------------------------- 
 
¶2. (SBU)  Minister of Economy Lubomir Jahnatek is continuing 
to pursue the strategy outlined in Reftel for buying back the 
shares of Transpetrol from Yukos Finance (YF), which is 
disputably controlled by Yukos Oil Receiver Eduard Rebgun, 
and Yukos International (YI, which remains in the hands of 
the American management team including Steve Theede, David 
Godfrey and Bruce Misamore).  Rebgun has so far put off 
Jahnatek's requests for a meeting while he works to secure 
his control of YF.  In the meantime Jahnatek continues to 
argue publicly and privately that a government repurchase of 
the shares is the only acceptable option for the GOS. 
Jahnatek received the public support of EU Energy 
Commissioner Andris Pielbalgs for the Slovak buyback after 
meetings in both Brussels and Bratislava in mid-September. 
In a Commission press release, Pielbalgs expressed his 
support for the Slovak Government's efforts including the 
objective of ensuring third party access to oil 
infrastructure within Slovakia. 
 
RUSSIAN STRUGGLES TO GAIN CONTROL OF YUKOS FINANCE 
--------------------------------------------- ----- 
 
¶3. (SBU) Rebgun followed up the August 11 Dutch court 
decision, which gave him voting rights on the shares of Yukos 
Finance, with several measures to solidify his control of the 
Netherlands-based company that is also the parent of YI. 
After dismissing directors David Godfrey and Bruce Misamore, 
Rebgun named his associate, Sergey Shmelkov, as Director.  On 
August 15 Rebgun sent a letter to NautaDutilh, the Dutch law 
firm that represents YI and YF under Godfrey and Misamore, 
requesting that all files pertaining to Yukos Oil to be 
transferred to the Rebgun-friendly Simmons & Simmons law firm 
and that NautaDutilh discontinue all work related to Yukos 
Oil. 
 
¶4. (SBU) Rebgun brought a case against NautaDutilh in an 
Amsterdam court when the law firm refused to comply with 
earlier requests.  NautaDutilh argued that Rebgun's position 
was untenable because the bankruptcy proceedings in Russia 
are a sham.  In a September 21 decision, the Amsterdam court 
rejected Rebgun's claims, noting that there are no grounds to 
forbid Misamore and Godfrey "to take the position (at law or 
otherwise) that they are still the lawful directors of Yukos 
Finance B.V. and to be represented by the lawyers of their 
choice."  As a result of this decision, neither Rebgun and 
Shmelkov, nor Misamore and Godfrey, can take the position 
that they validly represent YF at this time. 
 
¶5. (C) On September 25, Rebgun sent a letter on behalf of YF 
to the Transpetrol Board of Directors requesting the board to 
convene an extraordinary general meeting to change the 
members of the board representing YF.  According to the 
shareholders agreement, YF appoints three of the five members 
of the Transpetrol board, and the GOS appoints the other two. 
 (Note: Only one of the five board members currently has 
clear ties to any of the interested parties.  The two GOS 
board members were appointed by the previous government and 
are loyal to the Hungarian Party, SMK.  MOE officials have 
told us that they have not had any contact with the 
"government's representative," and had no idea how they will 
vote.  The GOS would also like to fill their slots with 
 
BRATISLAVA 00000816  002 OF 002 
 
 
directors loyal to the current government.  One of the three 
YF-appointed board members, Jan Kridla, remains loyal to 
Godfrey and Misamore, but the other two, who also have close 
ties to Hungarian interests, are seen as acting somewhat 
independently. End Note.) 
 
¶6. (SBU) In response to Rebgun's request for a shareholders 
meeting to change the members of the Board, NautaDutilh and 
Greenberg Traurig, which represents the Yukos Oil creditor 
Moravel Investment Ltd., sent separate legal opinions to the 
Transpetrol Board.  Both opinions argue that the September 21 
court decision casts doubt on Rebgun's claim that he 
represents YF and ask the board to deny his request to seek a 
general meeting to appoint new board members.  Greenberg 
Traurig further argues that YF lacks authority to enter into 
negotiations concerning Transpetrol with third parties.  This 
claim is based on the irrevocable power of attorney granted 
by YF to YI in April 2005 to effectuate the legal transfer of 
the Transpetrol shares from YF to YI. 
 
¶7. (SBU) On October 5 the Transpetrol board of directors 
voted unanimously to postpone a call for a general meeting 
due to the uncertainty surrounding the control of YF.  The 
board noted that they had received contradictory legal 
opinions (from Rebgun and the two law firms) and requested 
Transpetrol to solicit an independent legal analysis of the 
situation. 
 
DEAL CLOSELY WATCHED AROUND THE REGION 
-------------------------------------- 
 
¶8. (C) Despite Minister Jahnatek's repeated statements that 
Slovakia will veto the sale of the Transpetrol shares to any 
third party, several countries continue to pursue a deal for 
the 49 percent stake.  Not surprisingly the most interested 
party is Russia.  Ambassador discussed energy security in the 
region with the Russian Ambassador to Slovakia, Alexander 
Udaltsov, on October 4th, noting the transparency and open 
access improvements with Slovak ownership as well as 
improvement in the upgrade timeline, which could benefit 
Russian interests.  Udaltsov was very well informed about 
Transpetrol shares and the GOS attempts to buy them back from 
Yukos.  He noted that Gazpromneft remains interested in 
purchasing the shares and would be willing to cede management 
control of Transpetrol to the Slovaks, which has been one of 
Jahnatek's primary objectives.  Udaltsov insisted that 
Gazpromneft is the best option for development of the 
pipeline as it has both the financial resources and technical 
know-how.  Udaltsov noted that "not everyone in the 
government supports the buyback option."  Jahnatek is 
scheduled to travel with Slovak President Gasparovic on his 
November 7 trip to Moscow, and energy security and the 
Transpetrol pipeline will be at the top of the bilateral 
agenda. 
 
¶9. (C) In an October 4 courtesy call on the Ambassador, 
Kazakh Ambassador to Slovakia Sharip Omarov outlined the 
GOK's interest in regional energy issues, especially the 
related to Odessa/Brody/Plock.  Omarov noted that Kazakh 
president Nazarbayev is planning a visit to Slovakia on 
November 19 and 20th, and that energy would be one of the 
main topics for discussion, including the 
Odessa/Brody/Bratislava option for Kazakh crude. 
 
COMMENT 
------- 
 
¶10. (C) By casting doubt on Rebgun's legitimacy to act on 
behalf of Yukos Finance, the September 21 Dutch court 
decision has reopened the possibilities available to Minister 
Jahnatek. He will continue to push for a meeting with Rebgun 
to effectuate a sale by YF.  With Slovak veto authority over 
any sale of the shares lapsing in April 2007, the GOS does 
not have the luxury of waiting for the various legal issues 
to come to a final resolution.  Unless Rebgun changes tact 
and begins negotiations in the coming weeks, Jahnatek will 
likely pursue other options.  He would urge the current 
Transpetrol Board to approve the transfer of shares from YF 
to YI.  A second option would be to negotiate a sale directly 
with YI based on the power of attorney granted to YI in 2005. 
 Neither option is without risk, but may be the only ways for 
Slovakia to regain control of the company.  End Comment. 
VALLEE