Medvedev Mediates Power Spat

PoolChubais has asked Medvedev to "rein in" Rosneft in a dispute over TGK-11.
President-elect Dmitry Medvedev has stepped in to try to resolve a dispute between state-controlled power firms Unified Energy System and Rosneft, UES chief Anatoly Chubais said Friday.

Medvedev's mediation could shed light on his policies on a sector facing deep change as the government looks to create a competitive market by selling dozens of UES subsidiaries and raising electricity prices to market levels by 2012.

The dispute centers on a lawsuit filed by oil giant Rosneft, which threatens to split up TGK-11, a unit of former power monopoly UES.

Chubais backs Kremlin intervention in the dispute.

"The president-elect has gotten involved in the negotiations and on his order a working group has been established … to resolve the issue," Chubais told reporters.

"This gives us confidence that the state will finally rein in a state company," he said, referring to Rosneft.

Chubais and Medvedev are central figures in the government's liberal camp, while Rosneft chairman Igor Sechin is one of the Kremlin's most powerful hard-liners. He is deputy chief of staff to outgoing President Vladimir Putin.

Rosneft spokesman Nikolai Manvelov said the company was seeking to resolve the matter in court, and declined to comment further.

Under the electricity reforms, UES must sell off dozens of subsidiaries by July 1.