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Oilfield blow to Yukos

Moscow, Nov. 5 (Reuters): Russia’s government renewed its crackdown on Yukos today by threatening to remove operating rights to key oilfields, shocking already worried investors and turning up the pre-election heat in Moscow.

The resources ministry said Yukos, whose top shareholder has been jailed, was set to lose access to some of the Siberian oilfields that are its financial lifeblood. The move came as President Vladimir Putin began a lightning tour of Italy and France ahead of legislative and presidential elections over the next few months. Putin has been working to shore up investor faith in Russian political stability since the Yukos crisis broke last month.

However Moscow share prices — bloated this year by booming interest in the nation’s oil-driven economic recovery — took a fresh dive today’s news, also rattled by debt rating agency Moody’s decision to cut its outlook stance on Yukos and its merger partner Sibneft.

“The failure or the partial failure to fulfil licenses obligations — almost inevitably in the current situation — will immediately lead to withdrawal of licenses for its oilfields,” the resources minister Vitaly Artyukhov told a state newspaper.

“The reason is obvious — the company whose controlling stake is arrested can hardly be a suitable partner for cooperation with a federal licensing agency,” Artyukhov told Rossiiskaya Gazeta.

Yukos’ former chief executive and major shareholder Mikhail Khodorkovsky was arrested in October on charges of fraud and tax evasion, a move that analysts said was orchestrated by the Kremlin to punish the billionaire for political activities.

He quit the job this week, and remains in jail. Another key shareholder, Leonid Nevzlin, flew to Israel today where he was granted citizenship of the Jewish state.

The Prosecutors’ General Office has also impounded a 42 per cent stake of Yukos, which belongs to Khodorkovsky and his allies.The head of the Opposition Russian political party that Khodorkovsky supports said financial support from the 40-year tycoon had ceased since his arrest. “It stopped,” said Grigory Yavlinsky, head of the liberal Yabloko party at a news conference. “It’s not possible for him to run any company or sponsorship activity from there.”

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