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The Moscow Times: Mitvol’s Agency Hit by Infighting

Monday, December 11, 2006. Issue 3558. Page 7.

The Natural Resources Ministry, which has led criticism of foreign oil firms such as Shell, dissolved into infighting between officials Friday, with the oil giant’s top critic shut out of a meeting and calling for his own boss to be sacked.

Oleg Mitvol, the outspoken deputy head of the ministry’s environmental inspectorate, was barred from a meeting about withdrawing firms’ licenses at the Federal Subsoil Resource Use Agency.

Mitvol’s office said in a statement that he was not allowed to attend the meeting despite having been recently appointed to the commission on licensing compliance.

In a separate development, Mitvol’s boss, the head of the ministry’s environmental inspectorate Sergei Sai, came under fire from his own boss, Natural Resources Minister Yury Trutnev.

“I will ask the government for a disciplinary punishment of the head of Federal Service for the Inspection of Natural Resources Use, Sergei Sai,” he told a joint meeting of his ministry with top prosecutors. He said Sai should more regularly check oil firms for noncompliance.

Mitvol himself told Ekho Moskvy radio that Sai should be sacked, along with other “delinquent officials.”

Mitvol has leapt to prominence in the last three months by touring oil and gas projects and warning several foreign firms that they could lose their operating licenses if they did not improve their environmental and technical records.
“The Russian oil industry — from production sharing deals to state oil majors — has been demonized in recent weeks. I would find it logical if companies landed a significant number of complaints via the Kremlin,” Adam Landes from Renaissance Capital said.

Analysts have said Mitvol’s criticism of Shell’s Sakhalin-2 venture, which is accused of ecological breaches, is meant to put pressure on Shell and its partners to cede a stake in the $22 billion project to state gas monopoly Gazprom on better terms.

They say the pressure should subside as soon as the two firms clinch a deal. Sakhalin-2 also involves Japan’s Mitsui and Mitsubishi and is due to supply liquefied natural gas to customers in Japan, South Korea and the United States from mid-2008.

Mitvol’s influence has spread recently into metals. Shares in Peter Hambro Mining, the country’s third-largest gold miner, plunged last week after Mitvol’s agency said it wanted five of the London-listed company’s licenses withdrawn.

Vladimir Bavlov, deputy head of the Federal Subsoil Resource Use Agency, said Tuesday that the statement was “without foundation and premature.” and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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