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. Last Updated: 07/27/2016

Imperial Takes Mitvol to Task

Itar-TassPolyus CEO Pavel Skitovich says the company is considering joint ventures and acquisitions to increase its output.
London-listed Imperial Energy on Friday accused Oleg Mitvol, the deputy head of the Natural Resources Ministry's environmental watchdog, of causing damage to the oil firm and its reputation after a misleading statement sent its shares into a tailspin.

On Thursday, the Natural Resources Ministry posted a statement on its web site claiming that it had "annulled" five licenses being operated by Imperial Energy and that the company was failing to meet targets at some of its concessions.

Shares subsequently plummeted by 15 percent on the London Stock Exchange. Imperial was quick to refute the claims, and the shares eventually closed 6 percent down Thursday.

The day before, Imperial's shares had risen by 15 percent after a state reserves committee confirmed reserves at a new oil field.

Mitvol, who has previously claimed that Imperial overstated its reserves and failed to meet production targets, confirmed by telephone Friday that the announcement related to five concessions relinquished by the company in April 2006 that were not commercially viable. But Imperial said it was not satisfied and would ask the Natural Resources Ministry to publish an official retraction.

"Mitvol has gone off the map as far as the Russian authorities are concerned," Imperial chairman Peter Levine said by telephone from London.

"The only [transparency] issue is Mitvol's actions and his irresponsible statements. Imperial is fully compliant with its license obligations."

"Mitvol has acted outside of his authority and has severely damaged his own credibility," Levine said.

Artyom Konchin, an oil and gas analyst with Aton brokerage, said that the conflict was limited to the Federal Service for the Inspection of Natural Resources Use, adding that it was receiving no support from other agencies.

"[The service's] statements were provocative and not entirely objective. Withholding information in these circumstances could be seen as market manipulation," Konchin said.

In July, Imperial Energy approached Britain's Financial Services Authority to investigate matters regarding its share trading and share price. The investigation is ongoing.