OREANDA-NEWS. March 19, 2010. Rosneft informed its British and American customers that their payments for crude purchases from the Russian oil company could be frozen. The threat arose after British and US courts issued their rulings in connection with Rosneft’s loss in a lawsuit filed against the company by ex-shareholders of Yukos.

Crude exports to the US and the UK generate about 7% of Rosneft’s total revenue. If the court rulings are put into practice, Rosneft could slow down the payment flow and resort to the accumulation of receivables on its books. Most likely, the company will do its best to avoid a direct impact on profit through some intermediary schemes; however, it could take Rosneft weeks, or even months, to devise them.

Apart from intermediary schemes, we expect Rosneft to file an appeal and challenge the court rulings. This, however, also promises to take some time, during which export payments may still stay frozen.

The present news could have a heavy downward impact on Rosneft equity prices. Moreover, we project the events to develop in a negative manner for Rosneft in the near future. However, from a fundamental standpoint, we reiterate out target for Rosneft at USD 9.21 per share, until the company works out a definite solution to the problem, given that it has all of the necessary means to do it.