RUSSIA: Gazprom, Norilsk to Bid for Yukos

by Miriam Elder
Gazprom, Itera and Norilsk Nickel stepped forward Wednesday as the latest interested buyers in the upcoming Yukos auctions, a spokesman for the company's bankruptcy receiver said.

The three Russian companies join U.S. oil major Chevron and ESN Group, an Italian-Russian consortium, in hoping to bid for Yukos' assets. Several other large international companies have expressed interest in bidding, spokesman Nikolai Lankevich said, but he declined to name them.

The final valuation of the assets is due to be completed by the end of February, after which bidding will formally begin, Lankevich said.

State-controlled Rosneft and Gazprom are widely expected to snatch up the bulk of the nearly 200 Yukos assets due to be sold off this year. A preliminary valuation put the assets' value at $22 billion, falling short of the company's total liabilities, which stand at $26.6 billion.

Norilsk Nickel said in a statement that it would bid for Yukos' research and development center with an eye toward improving its research in hydropower.

A Gazprom spokeswoman hinted that the company would likely bid for the 20 percent stake that Yukos owns in Gazprom's oil subsidiary, Gazprom Neft. The stake is a holdover from Yukos' share in Sibneft, which Gazprom Neft was known as when Gazprom bought it from Roman Abramovich in 2005.

A spokesman for independent gas producer Itera suggested that the company could bid for the auctions' prize assets -- oil-production units Tomskneft and Samaraneftegaz.

"Itera is interested in building its resource base," spokesman Yevgeny Ostapov said. "If the tender for the Yukos sale includes assets that interest Itera, then the company will take part."

Analysts said Rosneft and Gazprom could be aligning themselves with foreign and domestic partners in a bid to avoid the legal mess that marked the battle for Yuganskneftegaz, Yukos' main production unit, in December 2004.

A legal injunction from a U.S. court prompted Gazprom to withdraw its bid for the unit, and it went to a new company called Baikal Finance Group instead. Rosneft took over the group a few days later.

"The fate of the major assets will be decided by the Kremlin, rather than these auctions," Alfa Bank chief strategist Chris Weafer said.

Most of the companies that have signaled interest have strong links to Gazprom and Rosneft.

Chevron formed a joint venture with Gazprom late last year. ESN Group, which includes Italy's Eni and Enel, sold a 5.3 percent stake in Unified Energy Systems to Gazprom in 2004 and is believed to have initially bought the stake on Gazprom's behalf.

Itera, once the country's largest independent gas producer, has seen its assets steadily chipped away and passed along to Gazprom since President Vladimir Putin appointed Alexei Miller as Gazprom CEO in 2001.

The Florida-registered Itera remains the only independent gas producer in the country with an export license.

Rosneft has been seeking to boost its presence in the gas sector. Yukos' 9.4 percent stake in Rosneft will also go up for auction.

Robert Amsterdam, a lawyer for former Yukos chief Mikhail Khodorkovsky, who was indicted last week on new charges, warned: "We will go on a campaign day and night that ensures that any company that buys those assets will pay the price."


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