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Minister gives cos. six months to update licensing agreements

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Russia's natural resources minister said Tuesday the agency for mineral resources and oil and gas companies will be given six months to update licensing agreements.
NEFTEYUGANSK, October 24 (RIA Novosti) - Russia's natural resources minister said Tuesday the agency for mineral resources and oil and gas companies will be given six months to update licensing agreements.

"We simply propose that companies unilaterally specify and update data," Yury Trutnev said.

Russia's authorities have been stepping up pressure in recent months on oil projects developed by foreign and domestic companies, which some experts view as the Kremlin's attempt to increase state control over the energy sector.

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, which is being implemented under a production-sharing agreement dating back to 1994.

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

Trutnev also warned of a possible revocation of licenses from companies that violate legislation or the provisions of agreements on mineral deposit use.

Trutnev said companies might not necessarily know all the specifics of deposits in the initial development stages, which is why they must introduce timely changes by updating figures and rationalizing projects.

He pledged the ministry will continue to demand compliance with licensing agreements and to "monitor their implementation."

Trutnev pointed to a decline in the number of violations of licensing agreement, adding that the ministry was focusing on environmental issues.

He added that he hoped Total would rectify irregularities at the Kharyaga deposit, noting that the company has been given time to bring all its indicators into compliance with the licensing agreement.

"Serious violations have been exposed, particularly those relating to prospecting, drilling and production," he said.

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