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Rosneft Subsidiary Buys Back Shares Held by Yukos

AP
Tuesday, 27 Mar 2007 | 4:18 AM ET

A subsidiary of the state-controlled Russian oil company Rosneft on Tuesday bought at auction a 9.44% share in Rosneft that had been owned by the bankrupt oil giant OAO Yukos.

The hammer price was 197.8 billion rubles ($7.6 billion). The bidding went through 10 steps before the RN-Razvitiye company won the auction.

The other bidder was TNK-BP, a joint venture including Britain's BP.

Yukos once was the biggest oil producer in Russia, but the company was driven into bankruptcy after the politically charged arrest of its head, Mikhail Khodorkovsky, and the levying of billions of dollars in back-tax bills.

BP/Rosneft to Battle it Out in Yukos Auction
BP's Russian joint venture TNK-BP and Russia's Rosneft will kick off the battle today for assets in Yukos, the now defunct Russian oil major brought down by $33 billion worth of Kremlin-imposed back-tax claims. Natalia Leshchenko, Russia/CIS Analyst at Global Insight, has analysis on how the auction will play out with CNBC's Geoff Cutmore.

Khodorkovsky was sentenced to eight years in prison for fraud and tax evasion after what critics called a show trial to punish him for funding political parties opposing President Vladimir Putin. The state auctioned off Yukos' prime production subsidiary at the end of 2004, selling it to an apparent shell company that quickly resold it to state-controlled OAO Rosneft.

That catapulted Rosneft into the No. 3 spot among Russian oil producers. Meanwhile, state-controlled gas monopoly OAO Gazprom, already the world's biggest gas producer, was busy expanding its oil business and in 1985 bought the Sibneft oil company.

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