Russia's Oil Patch Is Going Down The Drain

Low prices and scarce investors are devastating the industry

In Yukos Oil Co.'s fortress-like Moscow headquarters, Chief Executive Mikhail B. Khodorkovsky still talks confidently about the future. But behind the crenellated walls of the century-old building, Russia's second-largest oil producer is crumbling. Revenues plummeted 12%, to less than $4 billion, this year, and Yukos is struggling to repay $1.1 billion in loans due by the end of 1999. Regional authorities are threatening to revoke Yukos' production licenses for nonpayment of taxes. The company's chief shareholder, Menatep Bank, is on the verge of bankruptcy.

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