New rumours swirl in Yukos battle

Is the sun setting on Yukos?

The long-running battle between the Kremlin and Yukos has taken a fresh twist, as press reports linked a new firm to the oil giant's key unit.

Surgutneftegas, Russia's fourth-biggest oil producer, is now said to be behind Baikal Finance Group, the surprise buyer of Yukos' main production unit.

Yuganskneftegas, which produces 60% of Yukos' output, was sold in a forced auction after being seized by bailiffs.

Russian authorities are demanding Yukos pay $27bn (£14bn) in taxes and fines.

Yukos' shares have fallen by another 30%, and were suspended on Moscow's Micex exchange.

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Speaking on local television Russian president Vladimir Putin shed some light on the ownership structure of Baikal, saying that the shareholders in the company were "exclusively individuals".

"These individuals have been in the energy business for many years," he explained. "As far as I have been informed, they intend to build relations with Russia's other energy companies interested in this asset."

He also gave his backing to the auction, dismissing claims by Yukos and its shareholders that the assets had been illegally seized.

"As far as I have been informed, the auction conformed completely with current Russian law," Mr Putin said following his meeting with German Chancellor Gerhard Schroeder.

"I expect that all other activities in this area in the future will also take place according to law. "

But the White House later condemned the handling of Yukos, warning the affair could have a "chilling effect" on foreign investment in Russia.

Muddied further

The real buyer of Yuganskneftegas could be a consortium of Surgutneftegas and Gazprom. Each company had about $5bn available Gazeta newspaper

The initial reaction of newspapers and analysts to Baikal's winning bid in Sunday's auction was to claim that Baikal was a front for state-controlled gas company Gazprom.

They said that by hiding behind Baikal, Gazprom would be able to avoid an US court injunction that barred the firm, and foreign banks, from taking part in the auction.

One problem thrown up by this scenario was how Gazprom would find the 261bn roubles (£4.8bn; $9.4bn) Baikal had agreed to pay for Yuganskneftegas.

According to Russian papers on Tuesday, cash-rich Surgutneftegas has provided the solution.

"The real buyer of Yuganskneftegas could be a consortium of Surgutnftegas and Gazprom," the daily Gazeta said. "Each company had about $5bn available at the moment of purchase."

Speculation is rife about who Baikal's bosses really are

The firm is either working alone or in partnership with Gazprom, the papers allege.

Gazeta says that the director of Baikal, Valentina Davletgareyeva, is a shareholder of two companies affiliated with Surgutneftegas, while at the auction Baikal was represented by Surgutneftegas employee Igor Minibayev.

Gazprom has denied that it is behind the purchase.

Shares of Surgutneftegas climbed on Monday and Tuesday, while Gazprom's stock dipped.

"Yesterday's trading session showed who the investors believe to be the purchaser of Yuganskneftegas," said the daily Kommersant. "They gave the winner's garland to Surgutneftegas."

Hanging on

Yukos has said it will fight to keep control of Yuganskneftegas, claiming that the sale of its main production unit will lead to the dismantling and collapse of the company

Yukos boss Steve Theede has vowed fight on following the auction

Yukos chief executive Steven Theede said that while the sale of the unit was an "irreversible act", Yukos would take legal action to recover $20bn in damages.

Menatep, Yukos' main shareholders' group, is also planning to legal action.

Analysts said that while Yukos' chances in the courtroom are slim, its decision to file for bankruptcy protection in the US may have strengthened its hand somewhat.

There also have been widespread complaints from investors and the US about the treatment of Yukos shareholders.

Yukos claims that the political ambitions of its founder, Mikhail Khodorkovsky, have led to it being targeted by the administration of Russian president Vladimir Putin.

Mr Khodorkovsky was arrested last year and is now in jail facing separate tax fraud charges.