In the opinion of the agency's experts, the main reason for the increase in risks is "withdrawal of the bulk of the revenues due to heavier tax burden". Besides, Fitch points out "the increasing political influence and aggravating environment in this sphere, because the oil companies will have to pay the state more for each extracted barrel of oil".
"The oil prices have been unsteady over the last four years, but significantly went up in the first quarter of 1999 reaching the 20-year maximum", reads the report. As a result, most market participants got peak profits.
Despite the current high revenues, the risks will grow in the longer term, believes Fitch. "The odds of YUKOS going bankrupt, having failed to bear the growing tax burden, or being forced to make substantial concessions to the taxation authorities are high", reads the press-release.
According to Fitch YUKOS' revenues depend on several factors and first of all on "the political issues directly related to the arrested ex-president of the company".
The agency's experts do not rule out the possibility of the government's becoming YUKOS owner as a result of the debt relief in exchange to the company's assets.
Fitch points out the growing tax rates all over the world resulting from the increase in the oil prices over last eighteen months. In 2002-2003, for instance, the tax on oil companies' profits went up in Great Britain.
