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Kremlin tightens grip in Bashkir



By Upstream staff 

The Moscow Arbitration Court ruled today that the state should be handed full control over $7 billion worth of oil assets previously owned by private companies based in the Volga region of Bashkortostan.

The move will further tighten state control over the strategic energy industry as analysts expect the assets to pass into the hands of state giants Rosneft or Gazprom in a few months.

The court upheld the last of four lawsuits brought by the Federal Tax Service against the owners of the assets. Three similar lawsuits have been already upheld by the court.

All four suits will now go to the upper arbitration court as the owners' lawyers said they would appeal. If the suits are upheld the owners would have the supreme arbitration court as their last resort.

The Bashkir assets include mid-sized oil producer Bashneft, refineries Novoil, Ufimsky, Ufaorgsintez and Ufaneftekhim and retailer Bashkirnefteprodukt.

Bashneft produces 240,000 barrels per day while the plants can refine up to 400,000 bpd.

The assets were initially controlled by the government of the region in the Urals on behalf of the Russian Federation, but they have changed hands many times in the past few years.

Owners have included companies close to Ural Rakhimov, son of veteran Bashkortostan President Murtaza Rakhimov, although the current ultimate beneficiaries are unknown.

At present the owners are four companies - Agidel-Invest, Inzer-Invest, Yuryuzan-Invest and Ural-Invest - which each own around 15% in each of the six Bashkir companies, a Reuters report said.

The tax service has sued all the investment companies, saying all transactions involving shares in the companies were null and void and in July it won suits against Yuryuzan, Ural and Inzer, which must now return the shares to the state.

Today it won the suit against Agidel.

One of Russia's two leading bourses, RTS, halted all transactions in Bashkir oil shares in late July and analysts say trading is unlikely to resume before the lawsuits are over.


Wednesday, 15 August, 2007, 16:18 GMT  | last updated: Wednesday, 15 August, 2007, 17:03 GMT

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