Putin: Russia Won't Nationalize Yukos

MOSCOW – Russia does not intend to nationalize the Yukos oil company, but state-owned organizations will be able to bid if its assets are put up for auction, President Vladimir Putin said Friday.

Putin has repeatedly said the government's goal is neither to nationalize the company, nor to see it go bankrupt.

But, speaking at a meeting of international news agencies and journalists, Putin said that if Yukos assets are sold to pay off some $7 billion in tax claims, "everyone, including government organizations, will be able to bid," according to the Interfax news agency.

Putin also said the recent acquisition of state-owned oil company Rosneft (search) by natural gas giant Gazprom (search) had "no connection" to the situation with Yukos and was a "market-based decision."

Analysts had suggested that the merger of Rosneft and Gazprom — which also paves the way for foreign investors to buy shares in the world's biggest gas producer — was the first stage in creating a Russian hydrocarbons giant that would absorb Yukos' assets sold as collateral for its tax bill.

Core Yukos subsidiary Yuganskneftegaz (search) is being evaluated for sale by bailiffs.

Yukos, which is Russia's largest oil producer and pumps 20 percent of the country's crude, faces a debilitating tax bill, and its ex-CEO billionaire owner Mikhail Khodorkovsky (search) has been jailed and charged with tax fraud and evasion.

The legal actions are widely seen as punishment for Khodorkovsky's dabbling in politics and for funding opposition parties before parliamentary elections last year.

Yukos' share price jumped 6 percent on Moscow's MICEX exchange on Putin's initial remarks, but cooled to previous levels on news that state companies could participate in possible asset auctions.

Meanwhile, Yukos board chairman Viktor Gerashchenko said management had agreed at a board meeting Thursday not to file for bankruptcy and continue to pay down its tax bills. He noted, however, that "it would become difficult to implement export contracts due to the export duty," Interfax quoted him as saying.

Gerashchenko said the company would work to unwind an unsuccessful merger with the Sibneft oil company that could see $3 billion paid for Sibneft shares returned to Yukos.