Lukoil caught in the crossfire

An investor favourite thanks to its Western-style management and handsome dividends, Lukoil could feel the fallout from a dispute between other major players

Dividends paid by Lukoil, Russia's largest privately held oil company, are under threat as a result of an intensifying legal battle involving Rosneft and Sistema. Kremlin-controlled Rosneft has initiated a $3bn lawsuit against conglomerate Sistema over alleged asset-stripping at Bashneft in a case that has echoes of Rosneft's dismantling of Yukos in 2003. The case is already damaging investor sentiment in Russia and now threatens to have a wider impact, as worries grow about claims that could be made by Rosneft on the Trebs and Titov oilfields joint venture, which is controlled by Bashneft and Lukoil. "We think the perceived risk to Lukoil's dividend has increased post the recent Rosneft-Sis