MOSCOW, April 12 (RIA Novosti) - Russia has annulled a contract with PricewaterhouseCoopers, auditor of the Sakhalin II hydrocarbon project in the Far East for 10 years, and selected a new auditor, the Industry and Energy Ministry said Thursday.

The ministry said the company's assessment of spending under the production-sharing agreement was unsatisfactory and Russian authorities had selected a Russian auditor, FinExpertiza, at a tender. FinExpertiza has completed the audit, the ministry said.

PwC is currently in the focus of Russian tax authorities, after a Moscow court annulled March 20 its contract with bankrupt oil company Yukos, which it audited in 2002-2004, amid accusations of covering up the company's tax shelter schemes and drawing up two different audit reports over three years. The court also ordered PwC to pay the state $480,000.

PwC said it would appeal against a court ruling invalidating the audit contract, which it said was unsubstantiated.

The U.K.-based company has won a tender to audit Russian natural gas monopoly Gazprom, its client since 1995, the energy giant said Monday.

The vast oil and gas project off Russia's Pacific coast formerly led by Shell was subjected to months of intense pressure last year from Russian authorities over environmental damage accusations and demands by foreign investors to double spending.

In December 2006, Gazprom acquired 50% plus one share in Sakhalin II for $7.45 billion.