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MOSCOW -- The Russian Justice Ministry announced it would sell a chunk of the embattled Yukos oil company's main production subsidiary, Yuganskneftegaz, which had been evaluated by an investment bank at $10.4 billion, the Interfax news agency reported, according to the Associated Press.
The announcement could speed the tax case against Russia's biggest oil producer toward the end game. For months, market watchers have been playing a guessing game, trying to establish what portion of Yuganskneftegaz would be sold, to whom and for how much.
Yuganskneftegaz, which pumps 60 percent of Yukos's oil, or around 1 million barrels per day, was being evaluated by investment bank Dresdner Kleinwort Wasserstein for sale against Yukos's tax debts, which amount to more than $7 billion for 2000-01.
A source in the Justice Ministry cited by Interfax said that the $10.4 billion figure was the lower of a range of values provided by the bank.
While Yukos has paid off some $3 billion of its original $3.4 billion arrears for 2000, the head of the Justice Ministry's Moscow division, Alexander Buksman, called the pace of payment "absolutely unsatisfactory," Interfax reported.
According to the agencies, Buksman said that Yukos owed a further $3.73 billion to Russia's tax authorities and a corresponding amount of the unit's stock would be sold through the Russian Property Fund to cover the outstanding debt. "We chose property in the form of a block of shares of Yuganskneftegaz," he was quoted as saying.
An announcement last week that the company would be given three months to iron out violations in Yuganskneftegaz's subsoil licenses had boosted speculation that the company had been granted a stay of execution and that a deal between Yukos's owners and the Kremlin was in the offing.
Tuesday's announcement raised the question of who would buy Yuganskneftegaz's stock. Yukos has said it would challenge any sale in the courts.
With its strong Kremlin ties and infrastructure that stretches close to Yuganskneftegaz's Western Siberian fields, Surgutneft, Russia's No. 4 oil producer, has long been considered a front-runner in a possible fire sale of Yukos assets.