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. Last Updated: 07/27/2016

Fitch: Political Risks Haunt Oil Sector

Political risks are constraining the creditworthiness of oil and gas companies in Russia, the world's second-largest oil supplier, Fitch Ratings service warned Monday.

"Those companies working side-by-side with the government are likely to benefit in the medium term," Jeffrey Woodruff, a director at Fitch's Energy Group, said in a statement. "Those perceived to be working counter to state interests are likely to experience greater obstacles to obtaining and maintaining items such as licenses and find that their executives and assets are subject to increased scrutiny from the state."

State Duma Deputy Mikhail Zadornov said business is starting to feel "additional pressure" from tax and monetary authorities. "Regional bureaucrats take their signals from the Kremlin, not the law," he said.

The government this year increased its control over the nation's oil and gas companies to boost taxes and export duties on the industry, which accounts for about a quarter of the economy.