Russian Business Empire Jukos Assets Auction

The sale of fallen Jukos empire's property begins on Tuesday at the company's headquarters in Moscow.

The first in the series of auctions with the aim to sell the property of the fallen Jukos business empire owned by the currently imprisoned Russian oligarch Mikhail Khodorovsky, estimated at 22 billion dollars, begins on Tuesday at the company's headquarters in Moscow. 

9.44 percent of the share in Rosneft will be offered for auction at the starting price of 7.4 billion dollars.

Jukos was once Russia's biggest oil manufacturer and Khodorovsky, who bought the company in the period of shady privatization processes in the early 1990s, was celebrated in the west as a bright example of a modern day capitalist. 

It did not take this ambitious entrepreneur long to become the wealthiest man in Russia. However, the investigations started in 2003, seen by many as the Kremlin's persecution focused on the politically ambitious Khodorovsky, resulted in his oil group's bankruptcy and an eight-year prison sentence for him.

The state oil company Rosneft, now the second biggest oil manufacturer in Russia after Lukoil, bought the Jukos main production unit Juganskneftgaz in 2004 for billions of dollars less than its estimated value. 

Analysts consider this company to be the most likely candidate to take over a lion's share of Jukos assets and the company recently took a loan in the amount of 22 billion dollars for this purpose. 

Apart from Rosneft itself, the British-Russian energy giant TNK-BP, Russia's third biggest oil manufacturer, has also shown an interest to buy the Jukos share. Jukos' shares in electricity companies, banks, and oil companies will be sold in the same way – by means of auctions which should be concluded by August.

The sale of Jukos' property might attract new bidders and new surprises and energy groups such as the American oil giant Chevron and the consortium of Italian energy groups ENI and Enel are also expected to show interest. 

According to the words of the court appointed bankruptcy trustee Eduard Rebgun, they are dealing with property estimated at 22 billion dollars, but the Jukos management and independent analysts claim that its real value totals up to 40 billion dollars. The assets sale will settle the debt with 68 Jukos creditors, accumulated over the course of the investigation and estimated at about 27.5 billion dollars.