Analysts on Yuganskneftegaz' selling

The situation with selling Yuganskneftegaz, YUKOS' main oil producing subsidiary, is developing according to the worst scenario, analysts with Veles Capital said commenting on unofficial information that the government was planning to put up 76.8 percent in Yuganskneftegaz for auction for $3bn to $4bn. "Authorities declared that Yuganskneftegaz would be sold in full but they did not keep their word," they pointed out. Analysts are at a loss why a stake of more than 75 percent of the authorized capital is called a "minority" stake and can be sold at a 60-percent discount. "Government agencies are interpreting laws for their own benefit again, thus trying to get one of the largest Russian oil assets for a song," analysts underlined. According to analysts, indirect evidence of this is unofficial information received from a member of the government that Gazprom will be one of the participants in an auction on Yuganskneftegaz. Experts draw attention to the fact that the funds received from the selling of Yuganskneftegaz will not be enough to pay off tax debts for 2001. Meanwhile, tax claims for other years will be filed against the company in the near future.

Guta Bank experts believe that Yuganskneftegaz' low price and Gazprom's participation in the auction are very negative news for YUKOS' shares. At the same time, experts reiterated that Gazprom's management said it had no plans to buy Yuganskneftegaz.