Update: Chechnya wants control of Grozny oil company

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"Oil is the main wealth of the Chechen Republic," the lawmakers said, adding that Chechnya's oil reserves amounted to 25 million metric tons and would be completely exhausted in 10-15 years.

GROZNY, March 21 (RIA Novosti) - Chechnya's parliament Tuesday asked the Kremlin to change the current profit distribution scheme from oil produced in the North Caucasus republic.

Deputies said in a statement that a controlling stake in oil company Grozneftegaz, a subsidiary of state-owned oil major Rosneft, should be made the property of the Chechen Republic.

"These measures are needed for a complex and systematic solution of economic problems, the rebuilding of Chechnya's economy and social sphere, and to increase political stability," the statement said.

"Oil is the main wealth of the Chechen Republic," the lawmakers said, adding that Chechnya's oil reserves amounted to 25 million metric tons and would be completely exhausted in 10-15 years.

They also said funds from Chechen oil exports were not being used to help rebuild the republic.

However, the lawmakers said Rosneft had restored Chechnya's oil industry.

"About 8.1 million metric tons of oil worth 45 billion rubles [$1.62 billion] were produced [in Chechnya] in 2001-2005," the statement said.

Rosneft told RIA Novosti that the state-owned company was acting in compliance with a government resolution of 2000 when Grozneftegaz had been established.

According to the resolution, all oil produced by the company is exported and funds from exports are transferred to a special Industry and Energy Ministry account. After that, the money is used to develop Chechnya's oil and gas and social sectors under a federal program.

"Rosneft does not distribute financial flows. It is up to the government to decide where and how the money is spent," a Rosneft spokesman said.

He added that 22 million metric tons (161.7 million bbl) of oil had been produced in Chechnya in 2005 and profits totaled $721 million.

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