US EXPERT: $4 BILLION FOR YUKOS MAIN ASSET IS TOO LITTLE FOR A START-UP PRICE

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WASHINGTON, October 15 (RIA Novosti) - In the opinion of Ariel Cohen, Russian market research fellow at Washington's Heritage Foundation, the start-up price of $4 billion for the sale of Yuganskneftegaz looks too low. Most other American experts on the Russian stock market and oil industry have refrained from any comment at all. Mr. Cohen believes that this price as well as the assets put up for sale call for confirmation.

He thinks a projected purchaser is less important in case an auction, including the process of application placement and decision making, is transparent and fair.

Ariel Cohen asserts that Western companies will retain interest in the Russian market in the foreseeable future since Russia possesses the world's largest hydro-carbon reserves after the Middle East.

Russian media reports cite the figure of $4 billion for which the government can sell 76.8 percent of shares of the YUKOS main extracting facility-Yuganskneftegaz. One of the likely purchasers is Gazprom's affiliated company.

An auction on Yugansneftegaz can be held at the end of November, according to Russian Federal Property Management Fund spokesman Vladimir Zelentsov. He referred to documents on Yugansneftegaz shares sale the RFPMF had received from the finance ministry, adding that the announcement of an auction can be published at the end of the month.

It was yesterday that Dresdner Kleinwort Wasserstein made public its financial conclusions on Yuganskneftegaz. "We decided to do this on agreement with our client, the Russian government, in the interests of transparency and complete openness," said David Waller, head of the appraising bank's press-service.

The Bank "Dresdner Klweinwort Wasserstein" has appraised Yuganskneftegaz at $14.7-17.3 with account of tax claims.

This classified information was submitted at the mass media following the finance ministry's report that Yugansneftegaz was appraised at $10.4 billion to be sold with a discountfrom this price.

The bank's statement says that the financial estimate of Yugansneftegaz according to the scenario of late-2003 corrected independent reserves appraisal is $14.3 billion, this scenario being too conservative for this kind of appraisal.

On deducting the YUKOS debt worth $2.9 billion as well as seeing tax claims upon Yugansneftegaz itself ($ 951.3 million) come in force, the price of the company may go down to $10.4 billion.

The bank has estimated the value of Yugansneftegaz proper, as an individual enterprise, within the bracket of $18.6 billion to $21.1 billion.

The bank has assumed that the position of Yugansneftegaz licenses will remain intact. "A relevant change can produce a strong impact on the price of the company," says the bank's statement.

At the session of its commission on October 8, Russia's ministry for mineral resources issued a ruling demanding that Yugansneftegaz settle its tax violations under license 21 within three months. This Friday Tyumenenergo disconnected Yugansneftegaz from electricity for debts.

The Russian justice ministry has not yet come up with any comments on the full information on the oil plant's appraisal made public by the appraising bank, and on rumours about the early sale of Yuganskneftegaz four times cheaper.

"We are not yet prepared to comment on these figures. A special statement will be made in the near future," said the justice ministry's spokesman.

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