Sidanko looks set to split with its Chernogorneft

Oil major Sidanko looks set to split with its bankrupt production subsidiary Chernogorneft, which is to be sold off before the end of the year, according to a local newspaper. The St. Petersburg Times reported that Sidanko supported a participant who, at a meeting of Chernogorneft's creditors, declared the assembly was illegal and should therefore be cancelled.
When the other creditors disagreed and signalled their intention to go ahead with the meeting, representatives from Sidanko and its allies stormed out. The remaining Chernogorneft creditors - holding some 65 % of the votes on the creditors committee - then continued with the meeting, voting to approve an external management program that calls for the oil producer to be sold in the fourth quarter of 1999.
Under that plan the sale can go ahead under the external manager's supervision with no need for further approval from the creditors committee, even though no price has been set for Chernogorneft, Sidanko representatives said. That decision was strongly opposed by the chairman of the creditors committee, Boris Volkov, a former Sidanko president. He also left the gathering.
Chernogorneft's creditors split into two camps, after Tyumen Oil Co., or TNK, declared earlier this year its desire to buy Chernogorneft from Sidanko. The events represented another step forward for TNK, which had most recently said that it had only managed to gather backing from 60 % of the creditors.

Chernogorneft, which produced 6.2 mm tons of crude oil last year, is a vital part of the Sidanko oil holding, Russia's sixth-largest oil company by production.