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Bloomberg: Russia to Review by June Bill to Cap Foreign Role in Resources

By Maria Levitov

April 4 (Bloomberg) — The Russian government will consider within two months draft legislation to legally restrict foreign ownership of companies in strategic industries, including energy and metals.

The bill will set up a commission chaired by the prime minister to reject foreign bids for majority stakes in Russian companies across 40 industries deemed essential to national security, said Vladimir Taraskin, head of the Energy Ministry’s legal department.

The legislation comes after Royal Dutch Shell Plc and its partners agreed in December to sell a majority stake in the offshore Sakhalin-2 oil and gas project in the Russian Far East to state-controlled OAO Gazprom. After the sale, threats to cancel key permits for violations of environmental laws stopped.

The draft law “formalizes the procedures that already existed” Taraskin said today in Moscow. “Alcoa passed through such procedures successfully.”

Alcoa Inc. in February said it aims to break even in Russia by the end of 2007, almost three years after buying the Samara and Belokalitvinsk metals plants from Moscow-based competitor OAO Russian Aluminium.

BP Plc’s Russian unit, TNK-BP, and Total SA could risk losing licenses to major fields as state companies consider taking stakes in their projects.

To contact the reporter on this story: Maria Levitov in Moscow at [email protected]

 

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