You are here
NEW YORK -- Russia moved ahead Friday with plans to break up the country's largest oil producer, announcing it would auction off a majority stake in the main production unit of oil giant OAO Yukos next month, reported Forbes.com.
The bidding for the Dec. 19 auction will start at $8.6 billion -- lower than even the most conservative independent valuation.
Steven Theede, Yukos's CEO, called the planned sale a "government-organized theft to settle a political score." Yukos's share price tumbled nearly 9 percent on Moscow's dollar-denominated RTS exchange in morning trading Friday.
The Federal Property Fund announced the state will proceed with a court-ordered sale of a 76.79 percent stake in Yuganskneftegaz, the production unit, against Yukos's multibillion-dollar back tax bills.
Investors have expressed concern that Yuganskneftegaz, which pumps about 1 million barrels a day -- 60 percent of Yukos's oil -- will be sold to a Kremlin-friendly buyer at a price below its value.
Crude oil prices rose Friday as traders took stock of this news, as well as reports of falling U.S. distillate supplies. Light, sweet crude for December on the New York Mercantile Exchange rose 48 cents from its overnight closing to US$46.70 per barrel at midday in Europe.
Prices fell 62 cents Thursday after OPEC said demand next year will slow.
On Wednesday, the Energy Department reported that U.S. supplies of oil rose for the eighth consecutive week, while inventories of distillate fuel, which includes heating oil, diesel and jet fuel, fell for the ninth straight week.