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. Last Updated: 07/27/2016

Kazakov Wants Oil Stocks Back

State Property Committee head Alexander Kazakov said Tuesday the government should consider holding on to its stake in key oil companies by repaying loans it received in last year's loans-for-shares scheme, news agencies reported.


"We should above all decide on the means to buy out the mortgaged package of shares," Interfax quoted Kazakov as telling a cabinet committee meeting, referring to stakes in five oil majors auctioned last fall to leading banks in return for loans to the strapped federal budget.


The government has until September to repay the loans, but has not budgeted money to do so. All expectations have been that the government would default, leaving the equity stakes in private hands.


Privatization, facing heavy criticism from Communists in the current presidential campaign, is on the agenda for a government meeting Thursday to be chaired by Prime Minister Viktor Chernomyrdin.


Vladimir Palutin, deputy head of the property and privatization department in Chernomyrdin's office, said in an interview that the government did not have any plans to renationalize or re-privatize shares that had already been auctioned.


"The decision [to auction the shares] was taken by President [Boris Yeltsin] and the government, and can be invalidated only on this level," Palutin said.


Auctions of stakes in LUKoil, Yukos, Sidanko, Surgutneftegaz and Sibneft fetched 2.4 trillion rubles ($500 million) in desperately needed privatization revenue for the 1995 budget, according to Interfax.


"The state should preserve its influence in oil companies," Itar-Tass quoted Kazakov as saying, according to Reuters. It was not clear what time frame the privatization chief was referring to.


Fuel and Energy Minister Yury Shafranik said in late February the government should pay more attention to management of the state's share in the oil companies in order to increase its revenue from the stake.


The only way the government would consider retaining the stakes and selling them again later is if legal violations were found in the auction process, he said.


The State Audit Chamber, a parliamentary oversight body, last week detailed a series of violations that it said it would forward to the Prosecutor General's Office.


Although an announcement by the Prosecutor General's Office on whether it would seek criminal charges was expected this week, a prosecutor's office spokesman was quoted by Segodnya on Tuesday as saying a decision on a probe would not be taken until next month.


State Property Committee spokesman Igor Plotnikov said last month that the government was drafting its own renationalization plan but gave no details of what it might contain or when it would be released.


Plotnikov suggested that government measures would be drafted as a way to forestall attempts for a more radical rollback of privatization by the State Duma.