ROSNEFT, the Russian state oil company that last week seized control of Yuganskneftegaz, the core asset of Yukos, yesterday boasted a 90 per cent surge in profits for the first half to $340 million (£176 million).

The company said that sales rose 37 per cent year on year to $2.3 billion as it increased oil production amid record market prices.

Crude oil production rose 14 per cent in the first half to 10.4 million tonnes, and gas production rose 30 per cent to 4.6 billion cubic metres. Earnings before interest, tax, depreciation and amortisation jumped 54 per cent to $713 million.

Rosneft, which is to merge with Gazprom, the world’s biggest gas group, bought Baikal Finance Group last week.

Baikal was named as the preferred bidder for Yugansk following an auction.

On Christmas Day, Russia’s Federal Anti-Monopoly Service approved Rosneft’s acquisition of Yugansk.

The consolidation of Yugansk with Gazprom will be regarded as a victory for President Vladimir Putin in his battle to restore government control over energy assets that were privatised by his predecessor, Boris Yeltsin.

Baikal’s sale to Rosneft confirmed speculation that Yugansk, which produces more oil than some Opec countries, would fall into the Russian Government’s hands.

The acquisition of Yugansk by Rosneft will add a million barrels of oil a day to its current output.

Yugansk was put up for sale by the Russian Government to pay off a string of tax bills imposed on Yukos by the state, which total about $27 billion.

The Yukos board has rejected the tax claim as an attempt by the Kremlin to expropriate the company from its biggest shareholder, Mikhail Khodorkovsky.

Mr Khodorkovsky, the founder and former chief executive of the Russian oil giant, is being held in prison on charges of tax evasion.

Yukos — which has been granted bankruptcy protection in America — has filed a lawsuit against Gazprom in Texas in an attempt to block the gas giant from acquiring any part of the embattled company.

Yukos had pledged to bring lawsuits against any organisation that acquired part of the oil group while it remains under Chapter 11 bankruptcy protection in the US.

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