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. Last Updated: 07/27/2016

Former Tomskneft Boss Held on Fraud Charges

A former general director of Tomskneft, one of the two main Yukos production units set to be sold off this year, was detained on charges of embezzlement and money laundering, the Prosecutor General's Office said Wednesday.

Sergei Simkevich, who headed Tomskneft from 2000 to 2006, was detained Tuesday in Tomsk on suspicion of being part of an "organized criminal gang" that transferred a total of 5.93 billion rubles ($220 million) from Tomskneft accounts into the Moscow branch of Trust Bank in an attempt to appropriate the funds and avoid paying off back taxes owed to the state.

"This criminal group organized the fictitious exchange of Tomskneft securities, bearing no relationship to actual market value," the Prosecutor General's Office said in a statement.

A spokesman for the Prosecutor General's Office refused to release any more details of the investigation.

Simkevich, 48, a Tomsk regional Duma deputy, also worked for Yuganskneftegaz from 1987 to 2000. Under former Yukos CEO Mikhail Khodorkovsky, Yuganskneftegaz was the company's biggest production unit, pumping 1 million barrels per day.

A spokesman for the Tomsk regional legislature was unable to comment on the arrest. No one at Simkevich's office answered calls Wednesday.

Claire Davidson, a spokeswoman for Yukos' London-based managers, was not immediately able to comment Wednesday.

Tomskneft, which produced 270,000 barrels of oil per day in 2005, is at the center of a potential tug-of-war between state-controlled energy giants Gazprom and Rosneft, as bankrupt Yukos' assets are sold off to pay back the 311 billion rubles ($11.7 billion) owed to the state in back taxes.

Yukos managers in Moscow last year rebelled against the control of Yukos majority shareholder GML, formerly Khodorkovsky's Group Menatep, and said they were in favor of cooperating with the firm's state-appointed bankruptcy manager.

Gazprom deputy CEO Alexander Medvedev expressed an interest in acquiring Tomskneft last year, while Rosneft is also widely considered to be eyeing the asset.

"There is no doubt that Tomskneft will be sold off this quarter and the two main players are Gazprom and Rosneft," said Artyom Konchin, an oil and gas analyst at Aton Capital brokerage.

He denied, however, that Simkevich's arrest would affect the price of the Tomskneft sale, saying that it would be considerably below the market price anyway.

"As opposed to the $4 to $6 per barrel of reserves market price, Tomskneft will sell for $2 to $3 per barrel, but this is because the quality of the assets is not very high," he said.