RusEnergy

25 April 2007 - Upstream OnLine - Russia's state-controlled Rosneft has submitted a bid to buy the East Siberian assets of bankrupt oil company Yukos at a court-enforced auction next week, a Rosneft source said today. The starting price for the lot, which comprises Yukos's Tomskneft oil production unit and two refineries in Angarsk and Achinsk, is set at 166.3 billion roubles ($6.45 billion). The source said Rosneft vehicle Neft-Activ would bid on behalf of the company, Reuters reported. Yukos has denounced the state-forced auctions, which are being held to recover its back tax debt, as a Kremlin plot to destroy what was once Russia's largest oil company and punish founder Mikhail Khodorkovsky for political activities. Khodorkovsky is now serving an eight-year jail term in Siberia. Rosneft has so far benefitted the most from the demise of Yukos as it already controls its former top oil production unit Yugansk. It has also bought a chunk if its own shares, which were controlled by Yukos, at an auction this year at a discount. State-controlled gas export monopoly Gazprom has also grabbed a chunk of Yukos's former property when it bought the company's gas assets in tandem with Italy's Eni and Enel. Yukos will virtually cease to exist in May after the sale of its East Siberian assets and another auction, at which the state will sell the company's Samara oil production unit and its three refineries in the same region. Analysts have said Rosneft will most likely win the Samara lot, but competition could be high for East Siberian assets as they could be of interest to Gazprom, which has large gas operations in Tomsk. However, a Gazprom source said today the company has no plans so far to bid for East Siberian assets. A source at Russia's third-largest oil company TNK-BP, half owned by UK supermajor BP, said the company also had no plans to bid. BP put in a rival bid during the auction of Yukos's minority stake in Rosneft but dropped out of the competition quickly despite having said it was there to win. At least two bids are needed to make the auction valid and analysts have said BP's move, which followed a meeting between its chief executive John Browne and Russian President Vladimir Putin, might turn into a broader tie-up at the next auctions. Gazprom has said the US'a Chevron had also expressed interest in some Yukos's assets. Chevron and BP declined to comment today. Tomskneft produced 220,000 barrels per day, but can quickly increase production due to its large crude reserves. Angarsk and Achinsk can refine over 500,000 bpd.