Yukos could be sold to state firm

Yukos won't be nationalised, the government insists

Russian President Vladimir Putin has thrown a huge question mark over the future of oil and gas firm Yukos.

Speaking on Friday, Mr Putin said that state-owned companies should be able to buy the assets of Yukos if they are put up for sale.

He said, however, that there were no plans to renationalise the company.

Yukos is battling to keep control of its key oil production subsidiary, which bailiffs want to seize and sell to pay off massive tax debts.

"The government is not seeking to nationalise Yukos, to pocket it," Mr Putin told a press conference.

"But if it comes to a sale of assets, or something like that, then any company, including under state ownership, could participate."

State-owned Gazprom, which is one of the world's biggest gas producers, is seen as a likely buyer if that situation arises.

Debt burden

Yukos has been hit with $3.4bn in back taxes for 2000 - with possibly similar amounts due for each of the succeeding years.

The ongoing battle with the government is seen by many observers as stemming from former boss Mikhail Khodorkovsky's support for opposition political parties.

He was arrested in October last year and is currently in jail facing charges of fraud and tax evasion.

The Russian government has hired Dresdner Kleinwort Wasserstein to value the Yugansk unit, which accounts for 60% of Yukos's production.

Yukos board chairman Viktor Gerashchenko said earlier on Friday that the company had decided not to file for bankruptcy, and will try to pay off its tax bills instead.

So far Yukos, which has had its bank accounts frozen, is estimated to have paid off about $2bn of its debts.