Unknown firm wins Yukos auction

Baikal Finance Group, an unknown company, won an auction for Russian oil company's Yukos's core asset yesterday with a $9.4 billion bid and analysts said whomever was behind the bid enjoyed Kremlin favour.

Gazprom, which had been favoured to win but was outbid, declared it had no links to Baikal. Analysts still believed the state-controlled gas giant or other state interests may have had a hand in the winning bid for Yuganskneftegaz.

Yukos is widely seen by analysts as the victim of a Kremlin campaign to crush its politically ambitious owner, Mikhail Khodorkovsky, and seize control of strategic sectors of the economy sold off in the chaotic privatisations of the 1990s. Mr Khodorkovsky is now on trial for fraud and tax evasion and faces 10 years in jail if convicted.

Baikal, named after a huge Siberian freshwater lake in the heartland of Russia's oil industry, bid 260.75 billion rubles ($9.4 billion) for Yuganskneftegaz, said the sale's organiser, the Federal Property Fund. Under Russian law the government can order a new auction or seize Yugansk in lieu of unpaid taxes if Baikal fails to pay the full amount it has bid within 14 days. The sale of Yuganskneftegaz, which pumps more oil than Opec member Qatar, went ahead despite a US court order barring Gazprom and its foreign bankers from bidding, pending further proceedings in Yukos's application for US Chapter 11 bankruptcy protection.

Baikal, which was not one of three originally registered bidders including Gazprom, may have been a hastily assembled vehicle allowing Russian state interests to get around the US court order, one analyst said.

"The political signal from the government on Friday was they would go ahead and they have found a way to go ahead that minimises legal risk," said Chris Granville, a strategist for investment bank UFG.

"There were three registered bidders and all three were named in the restraining order. Now the surprise is that a new entity emerges. The Russian state was not named in the restraining order nor was this entity," he added.

Russian news agency Itar-Tass said one of its reporters had checked the address given by Baikal in the town of Tver, 200 km outside Moscow, and had found a building housing a mobile phone shop and a food store.