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Monday, March 26, 2007

First the British, now the French

First it was the British whose energy investments in Russia were targeted and ejected; now it's France's turn. The Moscow Times reports:

Natural Resource Ministry officials have found widespread violations at Total's main oil field in Russia and may call for the French company's license to be revoked, a ministry spokesman said Thursday. "There are many significant geological violations, including production violations," spokesman Rinat Gizatulin said. Vladimir Smolin, one of four deputy heads of the ministry's environmental watchdog, is due to wrap up a two week long audit of the Kharyaga oil field on Friday, he said. Renewed pressure on the Total-led Kharyaga field comes as the government seeks to ensure that state-linked firms gain majority control over all large natural resource projects.

Total, which runs the field under a production sharing agreement, or PSA, with the government, owns 50 percent of the project. Norway's Norsk Hydro holds 40 percent and an oil company owned by the Yamal Nenets regional government owns the remaining 10 percent. The project sits on 97 million tons of oil. A decision on Total's operating license will be made after officials submit a report on the audit, Gizatulin said. Spokespeople at Total declined to comment on the audit. Moscow has been pushing to exercise an option in the Kharyaga PSA that allows a Russian company to buy 10 percent from both foreign participants.

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