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. Last Updated: 07/27/2016

Trutnev Slams Oil License Breakers

Itar-TassProsecutor General Yury Chaika, left, and Trutnev talking at Friday's meeting.
More than 10 percent of Russia's oil output, nearly 1 million barrels per day, is being produced illegally, Natural Resources Minister Yury Trutnev said Friday.

Trutnev made the statement during an official meeting intended to work out measures to tighten official controls over the extraction of mineral riches.

"More than 10 percent of the oil produced in Russia is extracted in excess of the numbers agreed in project documents," Trutnev said in a meeting between his ministry and the Prosecutor General's Office, which has also promised a tough line on licenses.

"As a result of the lowered vigilance on rational field exploitation, the oil recovery factor in Russia has fallen from 0.45 to 0.30 in the last 20 years," Trutnev said, a transcript of his speech released by the ministry said.

Trutnev said the government had issued over 12,000 mining licenses and added that official controls over their use had been too lax.

"The system of control over license agreements has practically been nonexistent," Trutnev said in remarks posted on his ministry's web site.

Trutnev's ministry took another swipe at the oil sector later in the day, when his deputy Anatoly Tyomkin warned that delays in developing new oil fields in eastern Siberia were jeopardizing the government's plans for an $11.5 billion oil pipeline leading to the Pacific coast.

Tyomkin said oil producers, such as state-controlled Rosneft and Gazprom, and TNK-BP, were seriously behind the schedules outlined in their licenses to develop new fields in eastern Siberia.

"This, in turn, poses a threat to guaranteeing the necessary volumes of oil for the capacity of the East Siberian-Pacific Ocean Pipeline," Tyomkin said.

Pressure on foreign firms mounted further Friday after an environmental watchdog agency reporting to Trutnev sent a report to prosecutors alleging ecological violations during gas-pipeline construction at the Kovykta field operated by TNK-BP, Interfax reported, citing the agency's deputy head, Oleg Mitvol.

Interfax said Mitvol blamed the Eastern Siberian Gas Company, a joint venture between the local government of the Irkutsk region and TNK-BP, for the violations but did not specify what they were.

The new allegations from Mitvol came immediately after Friday's talks between TNK-BP and gas monopoly Gazprom and a statement from Gazprom's chairman, Dmitry Medvedev, affirming that Gazprom might join Kovykta.

"Gazprom is open for talks. There have been proposals to develop [Kovykta] jointly. If we manage to come to an agreement, Gazprom would participate in this project," Interfax quoted Medvedev as saying.

(AP, Reuters)