The company up for sale is Slavneft, which is Russia's eighth largest oil producer, pumping about 300,000 barrels of oil a day from its fields in western Siberia.
Interest has been waning in the run-up to the sale with two major Russian companies pulling out last week, and the Chinese state-owned oil firm CNPC also dropping out of the bidding.
However, many commentators believe the most likely buyer to be Sibneft - a rapidly expanding Russian company which already owns a minority stake in Slavneft. It is expected that Slavneft will fetch around $US1.7 billion at the auction.
The proceeds of the Slavneft auction will go towards servicing Russia's foreign debts with the government due to pay off $17 billion this year.
