BP’s Russia venture TNK-BP abandoned its bid for a major stake in Rosneft less than 10 minutes into the first in a series of forced sales of assets belonging to the bankrupt Yukos oil major.

TNK-BP bowed out of the bidding in Yukos’ first bankruptcy auction on Tuesday when the price reached just $90m above the start price of $7.5bn for Yukos’ 9.44 per cent stake in Rosneft.

Its retirement left the only other bidder, state-controlled Rosneft, able to buy its own shares at a 10 per cent discount to the market price of $8.4bn, an outcome slammed by Yukos’ former management team as a “predetermined” expropriation by the state.

TNK-BP’s early surrender – despite assertions of the seriousness of its bid – came as little surprise to analysts who say the auction was designed from the outset to favour Russia’s state-controlled energy champions.

Some analysts voiced the opinion that TNK-BP, which is coming under increasing state pressure had participated in an attempt to win favour in Moscow. TNK-BP, however, said it had simply run out of change.

“This seems to have been a done deal,” said Chris Weafer, chief strategist at Alfa Bank. “There can be no doubt that these major assets are always going to end up in the hands of the state.” He added: “In Russia, these are the rules. If you have an opportunity to do a favour for one of the state companies you’d be foolish to pass it up.”

The smashing of what was once the nation’s biggest oil major over $33bn in back tax claims has marked a big shift toward state control of the energy sector. It has landed its former major owner, Mikhail Khodorkovsky, a Kremlin opponent, a jail sentence of at least eight years in a Siberian prison camp. Yukos’ former chief financial officer has already accused TNK-BP of legitimising a sale of “stolen goods”.

By Russian law, there have to be at least two participants in such auctions. “This was a tough auction,” said one banker involved in the process. “They are trying to come up with multiple bids …. But there are not many people able to credibly stump up that much funds.”

TNK-BP said on Tuesday it was “disappointed” by the outcome of the auction. It denied assertions it had mounted a dummy bid and said it had merely reached its limit. “This was $100m above the start price. This is a lot of money to us,” said Peter Henshaw, TNK-BP vice-president for communication. “We would have to sell 3bn litres of petrol in the UK to make $100m,” he said.

But analysts said its participation might well have won itself time and potential Kremlin favour. The Russo-British oil venture stands to lose its licence to develop its vast east Siberian Kovykta oil field.

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