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. Last Updated: 07/27/2016

Gref Backs Curbs on Foreign Bids

For MTEconomic Development and Trade Minister German Gref
Economic Development and Trade Minister German Gref on Thursday threw his weight behind a proposal to bar foreign firms from bidding for key oil and mineral assets -- a measure that has enraged Western companies keen to do business in Russia.

"I think that's normal practice. All countries do this," Gref told reporters.

Last week the Natural Resources Ministry proposed that only firms that are at least 51 percent Russian-owned would be allowed to take part in tenders for big deposits such as the Sakhalin-3 oil field in the Far East and the huge Sukhoi Log gold deposit.

Western firms reacted bitterly, saying the move was discriminatory and simply part of the Kremlin's bid to reassert state control over the country's most lucrative assets.

Gref added his ministry had raised the issue with the Natural Resources Ministry and agreed that holding closed auctions without foreigners was acceptable in principle.

Gref's hawkish remarks surprised analysts, who have always seen him as one of the few liberal reformers in an otherwise conservative government.

Gref had in the past criticized the government for seeking to boost its presence in areas where market forces must prevail.

Speaking to reporters, he added that he had not seen the ministry's concrete proposals. Gref also said the government should decide whether to bar Westerners from certain tenders only on a case-by-case basis.

The ban, if approved, will cut out almost all major Western companies working in Russia from getting an exploration or development license for a big deposit.

But the move also embittered domestic players because most Russian oil and metals majors are controlled by offshore holdings. Effectively, only large state companies would be allowed to bid.

 Foreign companies registered in Russia will be allowed to participate independently in auctions for 40 oil and natural gas fields in eastern Siberia in 2006, Interfax quoted a top official as saying, The Associated Press reported Thursday.

"The auctions for these fields will be open," the agency quoted Deputy Natural Resources Minister Anatoly Temkin as saying.