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Last Updated: Monday, 17 November, 2003, 16:20 GMT
Kremlin urges state oil control
By Stephen Dalziel
BBC Russian affairs analyst

Russian Defence Minister Sergei Ivanov
Sergei Ivanov has kept his counsel until now
Russian Defence Minister Sergei Ivanov has waded into the row over oil giant Yukos by calling for more state control over Russia's energy reserves.

In an interview with the Kommersant newspaper, Mr Ivanov said oil companies including Yukos were under-investing in exploring for new oil.

Mr Ivanov is one of the closest allies of President Vladimir Putin.

Yukos has been in the spotlight ever since ex-boss Mikhail Khodorkovsky was arrested for fraud last month.

View from the top

Mr Ivanov's intervention is significant because as defence minister, he tends to keep his pronouncements to military matters.

But as one of the closest allies of the President, Vladimir Putin, when he ventures off this subject there can be little doubt that he is expressing an official, not merely a personal, opinion.

So his blunt statement that strategic reserves, and notably oil, should come under tighter state control will be seen as a warning of possibly greater state interference in the hitherto independent oil companies.

In the past few months, the Yukos oil company has been subjected to raids on its premises by the tax police, and two of its leading figures, Platon Lebedev and Mikhail Khodorkovsky, have been arrested.

As the interview was published, news came through that the department of the Interior Ministry responsible for combatting organised crime is considering pressing criminal charges against two other oil companies, Sibneft and Rosneft.

Sibneft is joining with Yukos to create Russia's largest oil company.

Outside influence

Mr Ivanov claims that the oil companies are not investing enough in exploring for new reserves, and says that the oil currently being produced is thanks to work carried out in the Soviet era.

Many in the oil community would dispute this.

In 1995, when Mr Khodorkovsky took over state assets to form Yukos, it was making huge losses; it's now so profitable that there's serious interest from the American oil giant, Exxon-Mobil.

But perhaps therein lies another Kremlin fear: too much control of Russia's resources by foreigners.

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