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Russia's Natural Resources Ministry seeks no license revocations -1

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NEFTEYUGANSK (Western Siberia), October 24 (RIA Novosti) - Russia's Natural Resources Ministry does not seek to revoke licenses of oil companies violating environmental legislation in the country, but favors economic sanctions, a senior ministry official said Tuesday.

"Licenses should be revoked only in the most flagrant cases, but in other cases economic sanctions should be imposed on negligent producers," Sergei Fyodorov, the head of the ministry's department on state politics, said.

Russia's authorities have been stepping up pressure on oil producers in recent months. In September, the Natural Resources Ministry withdrew a key environmental permit for the huge Sakhalin II oil and gas project led by oil major Royal Dutch Shell in Russia's Far East, being implemented under a product-sharing agreement dating back to 1994.

In late September, the ministry also announced planned probes into another product sharing agreement, the Kharyaga deposit in northern Russia, implemented by French oil major Total, and the Kovykta gas project in East Siberia, developed by Anglo-Russian joint venture TNK-BP.

Fyodorov said that out of 505 exploration and production licenses issued in West Siberia, deadlines for presenting technical projects for state examinations had been breached in 85 cases.

However Natural Resources Minister Yury Trutnev, who is currently on a working visit to the Khanty-Mansi Autonomous District in Western Siberia, took a harder line on sanctions against companies who violate natural resource regulations.

"Those guilty of violating legislation and provisions of agreements on mineral deposit use will be severely penalized, potentially by revocation of licenses for the development of oil and gas fields," said Trutnev.

The minister will be visiting Sakhalin on October 25 to announce the results of an official investigation into violations of environmental laws under the Sakhalin II project.

Russia's Federal Agency for the Management of Mineral Resources said Tuesday it may consider revoking five licenses for Rosneft-Purneftegaz, a branch of the state-controlled oil company Rosneft.

Sergei Sai, the head of the Federal Service for the Oversight of Natural Resources, said the environmental watchdog's commission was considering revoking 30 licenses in the region following the results of the first six months of 2006. He added that investigation results on 17 licenses had been submitted to environmental protection prosecutors.

Apart from Rosneft-Purneftegaz, the environmental watchdog also instructed another oil company, RussNeft, to fix violations on 10 licensing agreements.

Pyotr Sadovnik, a deputy head of the service, said the talks concerned four licenses in West Siberia's Tyumen Region, and six in the Khanty-Mansi Autonomous District.

RussNeft, Russia's newest vertically integrated oil company, is among the country's top 10 crude producers. Its recoverable reserves exceed 630 million metric tons (4.6 billion barrels).

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