MOSCOW (AFP) - Russia set a date for the auction of Yukos`s main unit in a move that will pluck the embattled firm`s crown jewel and effectively destroy what last year was considered the nation`s best-run oil company.
Yuganskneftegas, which accounts for 60 percent of Yukos production, will be auctioned on December 19, the federal property fund said.
The starting price of the unit -- which pumps one million barrels of oil per day, or about as much as the US state of Texas -- will be 8.65 billion dollars.
Meanwhile the tax ministry slapped the bruised firm with an additional 5.92 billion dollars in tax claims, bringing its total tax debt to a staggering 24 billion dollars, or five times the company`s current market capitalization.
Yukos chief Steven Theede angrily denounced the Yugansk auction as "government-organized theft to settle a political score" as the government rushed to assure that the sale would not affect Russia`s oil exports.
"Yuganskneftegas is the heart of Yukos and its sale will lead to the destruction of the most efficient Russian oil company, and the one that has attracted the most Western investment," Theede said in a statement.
Industry and Energy Minister Viktor Khristenko said the sale of Yugansk would not affect Russia`s oil exports.
"Issues relating to shares and a change in ownership should not present problems for oil production from the technical point of view," Interfax quoted him as saying.
The government has seized Yugansk and is selling it in order to cover tax arrears against Yukos, which jumped to 24 billion dollars following fresh charges for 2003 that were announced on Friday.
The day`s news sent Yukos shares into a virtual freefall -- they closed the day at 2.3 dollars, down 22.43 percent on the dollar-denominated RTS Index. A year ago, the shares were worth nearly 16 dollars each.
Theede said the auction was an illegal sale to cover "absurd" tax claims.
"The sale is clearly illegal under Russian law, which states that non-core assets are to be disposed of first in tax settlement cases," he said.
"This expropriation makes a mockery of the protection of private property," he said. "The sale is made possible by the government`s creation of a completely artificial cash crisis brought on by the freeze of assets and bank accounts, and through preposterous and absurd tax claims in excess of the company`s revenues."
Yukos`s chief shareholder, the Menatep group, said in a statement that it planned to appeal the sale`s results in international courts and bring legal complaint against the winner, whichever company that may be, the Interfax news agency reported overnight.
Observers have speculated that the government aims to dismember Yukos and hand its choice assets to a state-linked firm to punish the political ambitions of its founder Mikhail Khodorkovsky, a billionaire who has himself been jailed pending a fraud trial.
President Vladimir Putin and other senior government officials have repeatedly denied such claims, saying tax authorities were simply prosecuting a tax cheat.
Yukos said the starting price announced for Yugansk -- coming in at only roughly half of Yukos`s outstanding tax claims -- suggested that the government aims to sell the oil giant`s other production units as well.
"The sale of Yuganskneftegas at a low price increases the probability that the Russian government will then proceed to steal more of Yukos assets through artificial sales to meet artificial tax bills," Theede said.
Independent valuations of Yugansk had suggested that a fair price for the unit should be between 14 and 20 billion dollars.
Authorities began auditing Yukos, which last year was considered the nation`s most transparent and best-run company, weeks after Khodorkovsky`s arrest on October 25.
As the tax ministry presented new claims against the parent firm and subsidiaries, the courts froze the company`s accounts and assets.
Potential bidders for Yugansk will have to deposit 1.7 billion dollars in order to participate, and have until December 18 to register their bid for 43 common shares, or 76.8 percent of the company`s stock.
No restrictions on foreigners participating in the auction have been set.
Investors have speculated that a state-affiliated company, perhaps linked to the government-controlled gas monopoly Gazprom, would end up purchasing the unit.

11/19/2004 - 23:48 GMT - AFP