Russia has auctioned off its last major state-owned oil company, Slavneft, in what has been billed as one of the largest and most open privatisations in the country's history.

Sibneft, an ambitious but controversial Russian oil firm founded in 1995, beat off competition from seven bidders to snap up the government's 75% stake in Slavneft for for $1.86bn (�1.2bn).

Slavneft is the country's eighth largest oil producer, pumping about 300,000 barrels of oil a day from its fields in western Siberia.

The company is associated with management problems, and hit the headlines when a leadership struggle ended with armed police storming the company's headquarters.

Sibneft, meanwhile, has been repeatedly accused of poor corporate governance, despite strenuous efforts to portray itself as one of a new breed of Russian firms.

Fair contest

This privatisation is a relative rarity for Russia.

In the past, other state companies were snapped up by the country's new breed of tycoons.

These well-connected billionaires paid a fraction of the market price for many assets in return for political support.

The Slavneft sale, meanwhile, was billed as more open and fair, with a straightforward tender open to companies in Russia and overseas.

Interest had waned ahead of the sale: two major Russian companies pulled out last week, and the Chinese state-owned oil firm CNPC later also dropped out of the bidding.

Russian buyer

This does not entirely dispel the impression that Sibneft was a favoured bidder.

Sibneft already owns a minority stake in Slavneft and was thought to be the most likely winner.

Like many other large Russian firms, Sibneft puts great effort into cultivating relationships with government.

The proceeds of the Slavneft auction will go towards servicing Russia's foreign debts. The government is due to pay off $17bn this year.