Rosneft is due to merge with gas and pipeline giant Gazprom, so that the sequence of deals amounts to a clear renationalisation of Yuganskneftegaz. It would have been done more straightforwardly if the Houston court's injunction 10 days ago had not scared off the US banks which were going to bankroll Gazprom acquisition of Yuganskneftegaz.

Baikal Finance has until January 11 to pay the full price of US$9.37 billion for Yuganskneftegaz, but with Gazprom and Rosneft lining up behind the deal, the money will no doubt be forthcoming.

Now the Russian government is expected to go after further Yukos assets in order to liquidate the balance of the company's claimed tax debt of US$27bn.

"Today the state - using absolutely legal market mechanisms - is ensuring its interests. I consider this perfectly normal," Putin said during a Kremlin news conference. "We all know perfectly well how privatization at the beginning of the '90s was conducted and how some market participants got multibillion state assets using different tricks, including some violations of then-existing legislation."

Yukos shareholder Group Menatep says that if the merger goes ahead, Menatep will sue Gazprom for taking part in an illegal expropriation. Yukos's lawyers told the Houston court last week that Gazprom had violated the injunction, something which Gazprom denies, although it refuses to answer questions about the deal.

The US State Department is critical of Russia's behaviour, but Putin and the Russian government express anger at what they call interference by the US courts. Gazprom and Rosneft however have major international interests and future plans, and they would be quite vulnerable to Western court action, especially if the US courts are followed by European courts.

While the dance continues, the value of Yukos, Gazprom, Rosneft and other Russian energy firms (all publicly traded in one form or another) remains highly uncertain. It's probably a wonderful time for hedge funds but not so good for straight investors in any of these companies.