THE Russian Government has engaged Dresdner Kleinwort Wasserstein, the investment bank, to value the main operating subsidiary of Yukos, the embattled oil giant.

Officials from Russia’s Justice Ministry said that DKW would place a value on Yuganskneftegaz, which accounts for about 60 per cent of Yukos’s total oil production, ahead of a sale. Proceeds from the deal will go towards settling the oil giant’s $3.4 billon tax debt by the end of this month.

Analysts said yesterday that Yuganskneftegaz could realise between $12 billion and $20 billion.

Observers have described the appointment of DKW, an arm of Germany’s Dresdner Bank, as a positive step towards ensuring that Yukos’s subsidiaries are sold at market prices.

DKW has 150 employees in Russia, although its London office will also be involved in the valuation process.

Bob Foresman, DKW’s head of Russian investment banking, said: “The ministry hopes to depoliticise the situation as much as possible and have a valuation performed along the most professional internationally recognised standards.”

The DKW move came as America and China for the first time approached the Kremlin to express their concern at the handling of the Yukos affair.

Condoleeza Rice, the US National Security Adviser, reportedly phoned Dmitry Medvedev, President Putin’s chief of staff, last week to voice her Government’s concerns at the way over the Yukos situation and the effect it was having on the world oil price.

There is alarm in Washington at the impact the Yukos affair could have on Russia’s energy sector and foreign investment in the country.

It is thought that Colin Powell, the US Secretary of State, and other senior members of President Bush’s cabinet, will relay a similar message over the coming days.

China, one of the world’s biggest oil importers, has written to Mr Putin to seek assurances that its oil supply from Yukos will not be disrupted.The People’s Republic, which is enjoying massive economic growth, receives 150,000 barrels of oil a day, or about 7 per cent of its consumption, from Yukos. A Yukos spokeswoman would not comment on the DKW appointment.

Under Russian law, Yukos is not required to be involved in DKW’s appointment nor even entitled to be informed of it. The Justice Ministry’s bailiffs already had full access to Yukos’s operations and documents, a privilege expected to be passed on to DKW staff.

Yukos’s shares in Moscow were up 5.5 per cent on news of the mandate. The shares have been on a roller-coaster ride over the past few weeks, prompting speculation that members of Russia’s Government were profiting from insider trading.

Yukos has paid $750 million of its tax bill for 2000 but faces a similar claim for 2001 and is being audited for 2002.

Analysts have said its final tax bill for 2000-2003 could total at least $10 billion.

WISHING WELLS OF SIBERIA

Yuganskneftegaz, which has 11.6 billion barrels of oil in proven reserves, is Yukos’s biggest production subsidiary and Russia’s second-largest oil producer. In the first quarter this year Yuganskneftegaz averaged daily output of one million barrels of oil, or about 60 per cent of Yukos’s total daily production. Yuganskneftegaz, based in western Siberia, began operations in 1964. Since then it has produced more than 10 billion barrels of oil. Yuganskneftegaz owns 26 oilfields, including Priobskoye, which produces 353,000 barrels a day. The Priobskoye field has recoverable reserves of about 3 billion barrels.