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. Last Updated: 07/27/2016

Government Says It Has Stopped Lukoil Exports

The Russian government said Friday it has suspended export operations of the country's largest oil producer, Lukoil, but company officials responded that exports were continuing and the dispute is likely to be settled.

Larisa Alyes, spokeswoman for the Foreign Trade Ministry, said a top government commission that monitors exports ruled last week to suspend Lukoil exports until the company provides full financial information on several contracts in the Baltic states. She also said Lukoil delayed payments of the government's share of export revenues.

But Alexander Kunitsky, spokesman for Lukoil, said Friday that the company did not stop exporting oil and was close to settling the dispute with the ministry.

"There are some minor disagreements concerning one transaction, but they will be settled within the next several days," he said.

The dispute over the Lukoil export operations comes as the Russian government is trying to assert tougher controls over the exports of raw mateirals. President Boris Yeltsin, in his first state-of-the-nation speech Thursday, stressed that "state control should be toughened over the export of strategic and energy resources from the country."

Last June, many joint ventures had been refused access to export pipelines, after the government accused them of exporting more than they produced and of failing to provide authorities with data. But export later resumed at reduced levels.

Lukoil was the first of Russia's three vertically integrated oil conglomerates, embracing production, refining and marketing operations. The other two are Yukos and Surgutneftegaz.

Last year Lukoil accounted for about 14 percent of Russia's crude output, producing 48.8 million metric tons, of crude a day and exported about 7 million tons, or 11 percent of Russia's total exports.

Kunitsky insists that the government only threatened to suspend the Lukoil export operations if the company did not provide all required information within three months.

"It was a reminder, which does not mean that we had to halt exports," he said.

Alyes, however, insisted the government decision included actual suspension of the Lukoil export operations. Alexander Kulik, aide to Russian Foreign Economic Minister Oleg Davydov could not say Friday if actual suspension of the oil giant's exports took place.

Both Kunitsky and Alyes said the report in Commersant Daily on Friday, saying that Lukoil was deprived of its right to export, was incorrect.

"So far, it is only a suspension," said Alyes.

The company is scheduled next month to sell 7.42 percent of its shares at open auctions, according to Lukoil Vice President Leonid Fedun. The state will retain a 45 percent controlling stake in the company for at least three years.