Kremlin to auction off Yukos stake

Published on Friday 19 November 2004 12:51

THE Russian government today said it will auction off its majority stake in the main production unit of Yukos, the country’s largest oil producer, next month.

The move is the latest in the Russian government’s attempts to break up the embattled oil giant.

The announcement from the Federal Property Fund confirmed that the state will proceed with a court-ordered sale of a 76.8 per cent stake in Yuganskneftegaz, the production unit.

Chief executive Steven Theede called the announcement a "bold demonstration of the contempt the government has for the rule of law.

"What we are witnessing is, simply put, a government-organised theft to settle a political score," Kansas-born Mr Theede said.

Investors are concerned that Yuganskneftegaz, which pumps about one million barrels a day - 60 per cent of Yukos’ oil - will be sold to a Kremlin-friendly buyer at a price below its value.

Courts have ruled that Yukos owes the country billions of pounds in back taxes, and today’s news comes just over a year after Yukos founder Mikhail Khodorkovsky was arrested on charges including fraud.