Russian Court Seizes Yukos' Bank Accounts

The Court Bailiffs Service for the Central Administrative District of Moscow today presented an Execution Act and began execution proceedings for YUKOS Oil Company's liability to pay RUR 99.4 billion in taxes, surcharges and penalties for the year 2000 pursuant to the ruling of the Court of Arbitration of Moscow of May 26 and June 29, 2004. Notices were also sent to Yukos' banks to arrest the company's bank accounts.

In accordance with law the objective of execution proceedings is not only full recompense of the creditor's claims but also preservation of the stable business operations of the company whose assets and funds are claimed for collection.

The actions of the Court Bailiffs Service to arrest the bank accounts create an indisputable threat of halting current operations of YUKOS Oil Company that are of strategic importance for Russia's fuel and energy industry, a threat to the company's ability to pay current taxes and meet its obligations to creditors.

In accordance with the Federal Law of the Russian Federation "On enforcement proceedings" securities owned by the debtor can be taken in recompense. YUKOS Oil Company currently owns an undisputed stake in OAO Sibneft that are highly liquid equities, the value of which exceeds the total of taxes, surcharges and penalties levied on YUKOS Oil Company by the ruling of the Court of Arbitration.

The Company's stake in OAO Sibneft was today offered for collection by Court Bailiffs Service. YUKOS Oil Company believes that the refusal to take Sibneft shares and arrest of its bank accounts will have a negative effect on the operations of the Company, and its ability to continue as a going concern.