Unknown company picks up Yukos unit at auction
Moscow: An unknown Russian company called Baikal Finance Group bought the core production unit of oil giant Yukos at auction for $9.3 billion on Sunday, gaining control of one of Russia's most prized oil assets. Virtually nothing is known about the winner except that it is registered in the city of Tver, in western Russia. The state-controlled Gazpromneft company, an oil arm of the Gazprom natural gas monopoly, had widely been expected to win the Yuganskneftegaz auction.

Interestingly, Baikal made its application only after a Houston court issued an injunction that restrained Western banks from financing Gazprom's bid. Experts suggest that there are no agreements between Russia and the United States that could make the Houston court's decision enforceable on Russian soil. Top Russian officials, including the prime minister and foreign minister, said the Houston court ruling was irrelevant on Russian soil.

News reports said a consortium of Western banks had frozen between $10 and 13 billion it had planned to lend Gazprom for its Yuganskneftegaz bid. These include the Deutsche Bank, ABN Amro, BNP Paribas, and Dresdner Kleinwort Wasserstein.

A Yukos spokesman said after the auction that the sale was illegal under Russian and international law and that the winner "has bought itself a headache".

Yuganskneftegaz, which pumps one million barrels per day, or 60 per cent of Yukos' total output, was auctioned in order to pay off some of the $28 billion in back taxes it says are owed by Yukos, Russia's largest oil producer and the target of a months-long campaign by prosecutors and tax authorities.
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