updated 10/12/2004 8:10:16 AM ET 2004-10-12T12:10:16

The Russian Justice Ministry has completed an assessment of the Yukos oil company and will sell off some of the company’s assets, the ministry said in a statement Tuesday carried by the Interfax news agency.

The announcement could help bring to an end the case against Russia’s biggest oil producer. Yukos owes more than $7 billion in taxes for 2000-2001.

For months, market watchers have been playing a guessing game, trying to establish how much of the company’s main oil unit, Yuganskneftegaz, would be sold and for how much.

The Justice Ministry had commissioned an independent valuation from investment bank Dresdner Kleinwort Wasserstein.

The Interfax statement quoted the ministry as saying Yuganskneftegaz had been valued at $10.4 billion, much lower than anticipated, and that it planned to sell some of the subsidiary’s shares.

Yuganskneftegaz pumps 60 percent of Yukos’ oil, or around 1 million barrels per day.

ITAR-Tass quoted Alexander Buksman, head of the Justice Ministry’s Moscow division, as saying that $3.73 billion in Yuganskneftegaz assets would be sold.

“We chose property in the form of a block of shares of Yuganskneftegaz,” he was quoted as saying.

The yearlong legal campaign against Yukos and its jailed former CEO Mikhail Khodorkovsky is widely regarded as punishment for his growing political clout. Though the Kremlin has repeatedly cast the case as a just clampdown on shady bookkeeping and dubious tax-optimization schemes, oil and gas analysts expect the company’s assets to be sold to Kremlin-friendly oil companies.


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