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Russian environment agency chief moves to fire outspoken deputy

MOSCOW, December 14 (RIA Novosti) - The head of Russia's environment watchdog has proposed firing his deputy, who led a recent crackdown on a vast Shell-run hydrocarbon project in Russia, a source in the federal service said Thursday.

Oleg Mitvol has overseen inspections of a series of leading Russian and foreign mining and hydrocarbon companies, and is known for radical moves such as ordering the demolition of cottages in a water-protection zone near Moscow.

"Sergei Sai wrote a letter to Natural Resources Minister Yury Trutnev yesterday, requesting an official probe into Mitvol's activities, a reprimand, and his dismissal," a source said.

But Mitvol, deputy head of the Federal Agency for the Oversight of Environment Protection, was upbeat about a possible probe and said he was prepared for it.

"I don't even want to comment [on the decision], it's ridiculous," he said. "I'm not concerned about this, as each of my three previous bosses made similar moves before leaving. Let them check."

The Sakhalin II probe, launched after Royal Dutch Shell doubled its cost estimate for the project, has prompted accusations that Russia's authorities are pushing to bring key assets back under state control.

After months of intense pressure Shell, which holds 55% in the $22-billion energy project in Russia's Far East, had its environmental approval revoked, and is facing court proceedings on compensation for ecological damage.

Shell and Russia's state-controlled energy giant Gazprom [RTS: GAZP] are now reportedly in talks on the latter's participation in the project. Industry insiders expect the Russian giant to gain a controlling stake in Sakhalin II.

The environment watchdog chief himself was subjected to criticism last Friday, when the natural resources minister said Russian authorities had all but lost control over compliance with environmental laws in the development of mineral resources.

"Over 10% of oil is produced in excess of volumes set out in documents," the natural resources minister said at a ministry meeting with the Prosecutor's General Office.

Trutnev said control over issuing mineral development licenses has also been loosened, and that while 12,000 such licenses have been granted, their monitoring system and inventory of oil wells were only introduced recently.

The minister said he would ask the government to consider reprimanding Sai, whose agency had conducted half as many checks this year as in 2005.

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