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. Last Updated: 07/27/2016

Trutnev Warns Oil Firms on Slow Eastern Siberian Finds

Oil companies could be punished for not working fast enough to find new reserves in eastern Siberia to fill a new pipeline to Asia, Natural Resources Minister Yury Trutnev said Wednesday.

The region has been earmarked by the Kremlin for development to replace reserves in western Siberia, the mainstay of Russian oil production for years, where output is expected to shrink.

"The pace [of booking new reserves] is hardly going to ensure a quick replacement of reserves ... particularly of crude oil," Trutnev said in a statement.

He did not name any oil companies but said he would punish those found to be investing less in exploration than they had committed to when they were issued with a license.

The leaders in east Siberian exploration are Rosneft, Surgutneftegaz and TNK-BP.

Trutnev said his ministry would operate "according to this principle: The number of substantial violations of license terms should be equal to the number of licenses revoked."

He also said he would ask the government to increase the spending allocated for eastern Siberia in its long-term program for exploration up to 2020.

There is added urgency because east Siberian crude is wanted to fill the second phase of a pipeline now under construction to pump Russian oil to Asia -- part of a Kremlin plan to diversify exports away from the West.

The first stage of the pipeline, with annual capacity of 30 million tons, will run to the Chinese border and is due for launch at the end of 2008. It will be mainly filled with crude produced in western Siberia.