Khodorkovsky & Lebedev Communications Center

Bio:

Sergey Uzornikov worked at YUKOS-Moscow from 2001 through early 2005, before transferring to Yukos-RM where he worked until October 2005. Mr. Uzornikov was a section head in charge of international audit and control.

Testimony dates:

January 14, 15, 18, 2010

Testimony Summary:

Most of the prosecution's questions were focused on topics and time periods outside of the scope of the indictment, with Mr. Uzornikov being asked to testify about events that occurred after he left YUKOS. Messrs. Khodorkovsky and Lebedev's names were barely mentioned during the first day of questioning and when the prosecution read Mr. Uzornikov's interrogation transcripts on the second day. Mr. Uzornikov was asked about Yukos Capital S.a.r.l., companies within YUKOS' consolidation perimeter incorporated in foreign jurisdictions, and the relationship between those subsidiaries and YUKOS.

Mr. Uzornikov testified that when he worked on collecting financial data for consolidated statements, that data was analyzed and compared with publically available information for other oil companies. Testifying about his work in the international audit and control division, Mr. Uzornikov explained that his section was newly created and was used to collect data, also. The section dealt with first-level consolidated companies within YUKOS' perimeter. According to Mr. Uzornikov, data collected by his section was used in creating consolidated statements.

Mr. Uzornikov testified that the purpose of consolidated statements was to show what the company was worth, to increase it credit rating and make it more attractive for investments. Analysts and investors used consolidated statements to compare YUKOS to other companies, to make recommendations on its shares and to evaluate the company's profitability. In very basic terms, as Mr. Uzornikov pointed out, investors and analysts compared revenues. Mr. Uzornikov remembered that YUKOS was tracked by Moody's and Fitch Credit Rating Agencies and its consolidated statements were widely reported on in the media.

Mr. Uzornikov explained what was meant by "consolidation perimeter" and what YUKOS companies were included. Mr. Uzornikov explained that only companies where YUKOS owned 50% plus one share or more, or companies where YUKOS had a controlling influence over company decisions, like Routhenhold, were included in the consolidation perimeter.

Discussing specific companies, Mr. Uzornikov testified that Evoil, Fargoil and Yukos Capital S.a.r.l. were within the YUKOS consolidation perimeter. Mr. Uzornikov testified that YUKOS received dividend payments from its subsidiaries.

He testified that a company with assets on its balance sheet that was consolidated one year simply did not disappear from being consolidated the next year and he never heard of anything remotely similar happening with any YUKOS companies.

After explaining a simple formula for "profit," Mr. Uzornikov testified that one could not have profit without revenue. Using YUKOS' consolidated statements, Mr. Uzornikov testified about YUKOS' income and expenditures. Mr. Uzornikov testified that YUKOS, as a vertically integrated oil company, was mainly involved in the production, refining and sales of crude oil and petroleum products. Sales of crude oil and petroleum products accounted for approximately 90% of the company's bottom line. Mr. Uzornikov testified that production companies were paid for their crude oil. Payments covered production costs.

Based on available YUKOS consolidated statements, Mr. Uzornikov testified that the company was profitable from 1999 onwards. Based on his knowledge, questions of YUKOS' privatization or internal company pricing would not have affected the company's revenue and profits, as reflected in consolidation statements.

Mr. Uzornikov testified that loans made in 2004 by Yukos Capital to Yuganskneftegaz, Samaraneftegaz and Tomskneft were necessary to help those companies pay for various production expenses and sales expenses, including salaries, Transneft fees and export fees. According to Mr. Uzornikov, prior to 2004 all export related expenses were paid by YUKOS.

Mr. Uzornikov testified that the Russian market was too small to consume all crude oil produced by Russian oil companies. YUKOS, like other companies, made most of its profits from crude oil export.