MOSCOW - The Russian Federal Property Fund has begun accepting applications for an auction of the government’s stake in the oil company LUKoil. A 7.59 percent stake in the company has been put up for sale for $1.928bn. The auction will be open to all qualified bidders; applications are due by September 27. The auction is scheduled for September 29.

According to the Russian Federal Property Fund, 64.639m shares with a nominal value of RUR 1.616m are put up for auction. The bidding increment (the amount by which the price of a lot is increased as potential buyers bid on it) is set at $6m.

Commenting on the possible final bid price, Kirill Tomashchuk, acting Chairman of the Russian Federal Property Fund, said: “If the market is higher than the starting price, the final price will be at the level of the market or a little higher.” He did not rule out that the auction “might not take place if the market drops significantly below the starting price”. At the same time, Mr. Tomashchuk does not think that the market will be bearish. “Macroeconomic and political factors, including the YUKOS factor, may affect the market price of the company’s stock,” he added.

According to Mr. Tomashchuk, the starting price for LUKoil’s stock was determined by a commission including the representatives of the Russian Federal Property Fund, the Economy Ministry and the Federal Agency for the Administration of Federal Property.

LUKoil’s authorized capital is RUR 212.64m. It is divided into 850.563m ordinary shares with a nominal value of RUR 0.025. A 63.3 percent stake is nominally held by ZAO ING Bank (Eurasia), and the Russian government has 7.59 percent.

Experts say the auction will be won by ConocoPhillips, the Vremya Novostey newspaper reports. It seems the US company is pretty confident about it, too. On August 28, a source familiar with the matter told Reuters that the US oil giant was seeking to buy up to 25 percent of LUKoil. LUKoil’s stock jumped 3.33 percent to $29.45 per share. So far, ConocoPhillips remains the largest bidder.