Russia said on Saturday it would welcome more offers for the assets of oil major Yukos as the only declared bidder, Gazprom, inked a co-operation deal with India's state-run ONGC oil firm. Russia is putting Yukos's core unit, Yuganskneftegaz, on the block on December 19 at a starting price of nearly $9 billion to get back part of a $25 billion back-tax bill which threatens to sink the country's top oil exporting firm.
Gas monopoly Gazprom is the only suitor to show its hand so far and is favourite to win, but a top official accompanying President Vladimir Putin on a visit to India said Russia was open to other offers.
"We are interested in the auction being as open as possible and in as many companies taking part in it as possible," Deputy Prime Minister Alexander Zhukov told reporters.
Zhukov did not elaborate. But Indian Oil Minister Mani Shankar Aiyar said after meeting Putin on Friday that Moscow would welcome bids for Yugansk either alone or in collaboration with Russian companies.
Shares in Yukos, once Russia's biggest blue chip stock, are spiralling towards zero. Investors say there will be no value left in Yukos after the auction as its other assets cannot cover the rest of its huge tax bill.
Yukos' plight is widely seen as a Kremlin punishment of its politically-ambitious founder Mikhail Khodorkovsky and a drive to regain the 'commanding heights' of the economy lost to a clique of oligarchs in the privatisations of the 1990s. Khodorkovsky is on trial for tax evasion and fraud.
Gazprom initialled a memorandum of understanding with ONGC - Oil and Natural Gas Corporation Ltd - to boost their upstream oil and gas co-operation in Russia, India and other countries.
But statements issued by both companies did not address the issue of bidding either jointly or separately for Yugansk. An ONGC spokesman declined to comment when asked whether the pact referred to this.
The MoU is due to be signed in Moscow later this month. It was not included in a package of business deals signed at Friday's India-Russia summit.
Energy analysts doubt the Kremlin would let a prime energy asset like Yugansk fall into foreign hands as it seeks to boost Gazprom's oil business to complement its status as the world's biggest gas firm.
Analysts speculate, however, that Russia would like to attract more offers as the Yugansk auction must have at least two bids for its result to be legally binding.
Terms for taking part are onerous, with an up-front deposit of $1.8 billion and full payment within 14 days meaning only deep-pocketed investors need take part.
Gazprom said it had agreed with ONGC to look at joint upstream projects offshore the far eastern island of Sakhalin, where ONGC has a stake in ExxonMobil's Sakhalin-1 project, and at refining and marketing projects.