Yukos, the Russian oil group, might file for bankruptcy in the next few days unless the authorities reduce the pressure they have been applying, its chief financial officer warned yesterday.
In an interview with the Financial Times at a time of growing brinkmanship between the company and the government, Mr Bruce Misamore said: "If we are insolvent because we do not have the cash to pay our bills, we have to declare bankruptcy. I think it is very likely. Bankruptcy is not a bad scenario, assuming everything is done in accordance with the law."
Mr Misamore said the authorities were taking about half the group's monthly $1.8 billion (€1.45 billion) in cashflow through freezing and collection orders on Yukos company and related bank accounts.
"All the cash is being swept up. We can't survive," he said.
The recent rise in oil prices - which dealers partly attribute to the uncertainties around Yukos - had provided it with "a few extra days" of cash, but would make little difference to its situation. There would be insufficient cash by the "middle" of this month.
Mr Misamore said the creditor banks to Yukos had already begun exercising their right to seize money after formally warning the company that they considered their loans in default. The banks have extracted $40 million so far, he said, suggesting that this figure would at least double in the coming weeks.
He said the Yukos management committee was meeting this week to review planned cuts in capital and operating budgets, which he warned "could very well affect oil production".
Mr Misamore said the result was likely to be a reduction in planned growth targets rather than an absolute decline in oil output, but that no agreement had yet been made with the state railways and pipeline operator beyond the end of August, after which the company's ability to export could be reduced.
No Yukos board meeting is scheduled but he said there were regular telephone conversations with directors and that the managers would seek board approval on any recommendation to file for bankruptcy.
Mr Misamore highlighted ways in which the authorities could ease the pressure on Yukos, including refunding up to $1.7 billion in value -added tax, a release of freezing orders or a change in court restrictions forbidding it from raising new funds through asset sales.
He said there had been significant contact with government officials over the past two weeks, with Yukos seeking a deferment in its tax bills. However, there had been no meaningful response.
