Shares in Russian oil giant Rosneft fell today in the stock's first session trading in Moscow as lawyers for rival Yukos sought to block a controversial London listing planned for Wednesday in the High Court.

Rosneft's Moscow-listed shares fell by 1.7 per cent to $7.42 after the first stage of an initial public offering that will value the company at $80 billion (£44bn).

The losses came as London’s High Court heard a challenge to the planned London listing, with Yukos arguing that the London Stock Exchange and the Financial Services Authority would be breaking laws outlawing dealing in "dirty money" if they allowed Wednesday's float to take place.

Yukos accuses the Russian Government of stealing its main oil producing subsidiary Yuganskneftegaz and selling it off at auction at a massive discount. Yuganskneftegaz was later acquired by Rosneft for $9.4 billion and is now the Kremlin-backed group's main asset.

The eleventh-hour London court case threatens to become a major embarrassment for the Russian President, Vladimir Putin, Rosneft's most important supporter, who has been hosting the G8 conference of global leaders in St Petersberg.

In the High Court, Clare Montgomery, QC for Yukos, is seeking permission to bring Judicial Review proceedings and an order banning Wednesday's flotation until the legal issues are resolved.

Mark Howard QC for Rosneft has claimed there is no suspicion hanging over the company. According to the Moscow Times, Rosneft has already planned a lavish London party to celebrate its listing on Wednesday.

The FSA and the LSE have argued that because Yuganskneftegaz was acquired by an act of state the float should go ahead.

Eric Kraus, portfolio manager at the Moscow-based Nikitsky Russia Fund, told Times Online that it was not surprising that Rosneft had dipped on its domestic debut.

"Rosneft does not a value in the conventional sense. Over 50 per cent of the placing was taken by strategic investors so that is paper we are never going to see again," he said.

On a price-to-earnings basis Rosneft, whose large strategic investors include BP, Malaysia's Petronas and China's CNPC, has been branded "vastly overpriced" by analysts.

"It is valued at around twice the level of Lukoil, Russia's premier energy company, which has a longer trading record, a better balance between refining and production and better governance," Mr Kraus said.

Against those factors stands the backing of Mr Putin, who has indicated he will back Rosneft to become a global power of the stature of Exxon Mobile, the world’s largest oil group, through acquisitions if need be.

"I wouldn't be surprised if the price dips a little more, but you get the feeling that one day the stock will be a must-have," Mr Kraus said.

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