Russian oil giants Yukos and Sibneft said yesterday they had agreed to annul a merger that would have created the world's fourth-largest oil producer, 10 months after announcing the deal and 101 days after former Yukos chief, Mr Mikhail Khodorkovsky, was seized on charges of fraud and tax evasion.
The arrest of Mr Khodorkovsky - Russia's richest man - immediately threw doubt on his agreement with Sibneft boss Mr Roman Abramovich, the owner of Chelsea football club, to combine their companies.
Analysts and traders welcomed yesterday's announcement, saying it eased fears of a messy divorce that could further undermine a Russian market already rattled by a sweeping investigation into Yukos that has seen several major shareholders accused of financial crimes and a security official charged with murder.
Last April, Yukos agreed to swap 26 per cent of its shares for 70 per cent of Sibneft stock and to buy a further 20 per cent of Sibneft for $3 billion in cash. The deal was completed in October. The annulment will reverse the deal, so returning 96 per cent of Sibneft to its previous owners.
Mr Khodorkovsky's supporters say he is the victim of a Kremlin-backed campaign to punish him for funding opponents of President Vladimir Putin.
