Western bank hired to value Yukos unit

Russia hired investment bank Dresdner Kleinwort Wasserstein today to value Yukos's main oil production unit.

Russia hired investment bank Dresdner Kleinwort Wasserstein today to value Yukos's main oil production unit.

The move has reduced the chances of a cut-price firesale to recover a $3.4 billion tax debt.

The government's move to hire a foreign bank to value Yuganskneftegaz, which pumps one million barrels a day, or 60 per cent of Yukos output, showed the government is determined to sell the unit and leave Yukos a shell.

Yukos shares rallied to 114 roubles, up 17 per cent on the day by this afternoon on hopes Yugansk may be sold for a decent price rather than nationalised in a process, which would destroy what value is left for shareholders.

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"This is positive for Yukos, because it means Yugansk will not be sold for nothing," said Valery Nesterov, an oil analyst at Troika Dialog brokerage in Moscow.

The stock is still down by over three-quarters since peaking in April as a legal onslaught against the company and its main shareholder, Mr Mikhail Khodorkovsky, has intensified.

Mr Khodorkovsky was back in court today as his trial on charges of fraud and tax evasion resumed after a one-week break.  He faces 10 years in jail if convicted.