In their opinion, Yuganskneftegaz will be purchased by a consortium of Gazprom and Rosneft, which could be joined by the German energy company E.ON. At the same time, Fitch noted that the Russian Justice Ministry had announced that the assets could be sold at about $10.4bn.

According to experts, this acquisition could improve the credit rating of Russia’s gas monopoly (now at “BB”, with a stable outlook). If Gazprom gains control over Yuganskneftegaz, which accounts for up to 10 percent of Russia’s oil production, this would have a significant impact on Gazprom’s portfolio of production assets, and it would expand its business structure, according to Fitch analysts.

For his part, Viktor Khristenko, the Russian Minister for Industry and Energy, told reporters on Tuesday that if Yuganskneftegaz changed hands, this would not affect the company’s production. He stressed that the government was going to see to it that a new owner maintained the rate of production and complied with license agreements.

Mr. Khristenko did not elaborate on the terms and time of the Yuganskneftegaz auction. He said other ministries and departments were responsible for the sale, including the Service of Court Bailiffs, the Justice Ministry and the Russian Property Fund. “I am not selling Yuganskneftegaz, and I am not buying it,” he noted.

Meanwhile, it is not ruled out that YUKOS could declare bankruptcy after Yuganskneftegaz is put up for sale, the Vedomosti newspaper reported citing its source close to YUKOS’s Board of Directors. According to the newspaper, the bankruptcy scenario was offered by foreign members on YUKOS’s Board of Directors at a teleconference last week. They motivated their proposal by fears that Yuganskneftegaz could be sold for a low price. But the company’s managers, who have the authority to decide on the issue, have a different opinion, the newspaper says. “The management of the company will do everything it can to prevent the bankruptcy of YUKOS,” YUKOS spokesman Alexander Shadrin said.

Yuganskneftegaz is YUKOS’s largest oil production subsidiary, accounting for about 60 percent of its oil output. All of Yuganskneftegaz’s shares are frozen, as well as the assets of other YUKOS’s production subsidiaries –Tomskneft and Samaraneftegaz. The freeze was imposed by court order as collateral against YUKOS’s RUR 99.4bn tax debt for 2000. The Justice Ministry plans to sell some of YUKOS’s assets through the Russian Federal Property Fund. The Fund’s official said the stake could be auctioned at the end of November 2004. According to unofficial reports, Yuganskneftegaz’s ordinary shares will be put up for sale (76.8 percent of the authorized capital) for $3bn to $4bn, taking into account a 60 percent discount.