Yukos Names Kukes as New CEO

Simon Kukes, a US citizen and former head of Russian oil company TNK, was on Tuesday named as the new chief executive of Yukos.

Russia's largest oil company moved swiftly to reassure investors after its former chief executive, Mikhail Khodorkovsky, resigned on Monday only a week after being arrested on charges of tax evasion, embezzlement and theft.

Mr Kukes said shortly after his appointment that he would not change Yukos's strategy. "We will keep everything the way it is, we will continue merging with Sibneft and we will keep our obligations to shareholders," he said.

His appointment may help revive negotiations with US oil companies ExxonMobil and ChevronTexaco over the purchase of a strategic stake in Yukos.

"Kukes has two competitive advantages: he is a US citizen which makes it harder for Russian prosecutors to touch him and he led TNK through a merger with BP," one person close to the company said.

His appointment came as Vladimir Putin, Russian president, told reporters on the eve of a visit to Italy that he would not roll back the results of Russia's privatisations in the 1990s, in remarks designed to sooth foreign investors' nerves.

"I am categorically against revisiting privatisation results, even if... the results are far from ideal. [It is] my deep conviction that this would lead to serious negative consequences for the economy and, as a result, for the social sphere," he told reporters, according to the Interfax news agency.

Russian prosecutors last week froze a 44 per cent stake in Yukos leading some investors to question whether the government was starting to renationalise privatised companies.

Mr Putin also said that the Yukos affair had played a "catalysing role" in changes at the top of his administration.

Alexander Voloshin, the former chief of staff, was replaced last week by Dmitry Medvedev as the head of the presidential administration in a move seen as reinforcing Mr Putin's powerbase.

Two other Americans are in board-level positions at Yukos with Stephen Theede, a former executive with ConocoPhillips of the US, becoming executive director of Yukos-Moscow and Bruce Misamore already chief financial officer.

Shares in Yukos were down 2.4 per cent at $12.35 in late afternoon trade in Moscow on Tuesday.

Mr Khodorkovsky said on Monday his decision to resign was dictated by the need to safeguard his company and employees from "the blows directed at him and his partners".

In a statement passed from a prison cell where he had been detained since October 25, Mr Khodorkovsky claimed he was giving up his role in business and dedicating himself to philanthropy and building "an open and truly democratic" society.

"Over the next few years I had set myself the goal to build an international energy company - one of the leaders of the global economy. But the situation that has developed today forces me to set aside my plans. I am leaving the company."

Investors took Mr Khodorkovsky's decision as an attempt to dissociate himself from the company.

The Kremlin tried to limit the damage from the Yukos scandal. Alexei Kudrin, finance minister, on Monday reiterated Russia's commitment to liberal economic reform and stressed there was no attempt at a broader re-examination of privatisations.

Dmitry Medvedev, newly appointed head of presidential administration, on Sunday questioned the prosecutors' tactics. But prosecutors stepped up the pressure by calling one of Mr Khodorkovsky's lawyers in for questioning.

Speaking in London on Monday, George Soros, the US financier whose Open Society Institute has been deeply involved in Russia, said that "the crackdown by [Russian President Vladimir] Putin sends an unmistakable message that independence of action will not be tolerated. It's the end of an era, the end of the era of robber capitalism and the beginning of that of state capitalism.

"The only chance of stopping this trend taking root is pressure, especially from Europe. Unfortunately, the US is too wedded to its Russian alliance to protest. The price of strengthening democracy in Iraq is weakening democracy in Russia. If there is popular pressure from the west against this, we could see Russia being forced out of the Group of Eight [industrialised nations]."

Lawyers representing Mr Khodorkovsky on Monday stepped up their diplomatic and political offensive in European capitals ahead of Thursday's summit between the EU and Russia.