MOSCOW : The Russian government will auction off Yuganskneftegas, the main production unit of embattled oil giant Yukos, on December 19 with a starting price of 246.75 billion rubles (8.65 billion dollars), the federal property fund announced.

The federal property fund published the details of the auction in the official Rossiiskaya Gazeta.

Earlier the justice ministry had decided to value Yuganskneftegaz — which accounts for 60 percent of production at Yukos — at 10.4 billion dollars, the low-end estimate provided in a separate assessment done by Dresdner Kleinwort Wasserstein (DrKW).

Yukos and the markets had expected a valuation closer to 20 billion dollars.

The markets have speculated that a low starting price could mean that the key oil asset may go to a government-linked company for a bargain-basement price, introducing a poisonous air to the Russian investment climate.

– AFP