The asset is a collection of oil fields in Russia’s Far East which currently produces 1 million bpd.

“The sale is a government-organised theft to settle a political score,” Yukos CEO Stephen Theede said.

The Russian Government's 16-month legal attack against Yukos has moved into what seems to be the final phase with the government also hitting Yukos with a new tax demand of $US6 billion for 2003 to add to the existing bill of $US24.5 billion.

Yukos's major shareholder, Group Menatep, has threatened any potential buyer with "a lifetime of litigation".

With foreign oil company's unlikely to for the unit because of the potential legal risks involved, the sale seems likely to open the way for greater state dominance over the oil sector if, as expected, state-controlled energy group Gazprom makes a winning bid.