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Daily Telegraph: Russia’s energy scourge turns attention to Imperial

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By Russell Hotten, Industry Editor
Last Updated: 2:39am BST 20/04/2007

The chairman of Imperial Energy, Peter Levine, has held emergency talks with the authorities in Russia after the oil company’s shares tumbled for a second day following threats to revoke some of its licences to operate.
 
Imperial’s shares fell 11pc yesterday following a 15pc plunge on Wednesday, after the deputy head of Russia’s environmental inspectorate, Oleg Mitvol, suggested the company was one of several operators that had falsified its reserves.

Imperial put out a strongly worded defence, and in Moscow late yesterday afternoon Mr Levine met Mr Mitvol and the governor of the Tomsk region to seek clarification about the allegations. A company source said both sides “asked a lot of questions and would now prepare the answers.”

Although several analysts thought the share price fall was overdone, investors were spooked because it was Mr Mitvol who led the charge against Shell last year over claims the company breached environmental licences at its Sakahlin 2 gas development.

Artyom Konchin, an oil analyst at Aton Capital in Moscow, compared the situation to alleged breaches by Peter Hambro Mining last year. The situation was resolved and the share price rose. Mr Konchin said: “Imperial has unfortunately become a target in Mitvol’s current campaign. We note that his actions seldom result in actual legal consequences for licences.

“We do not believe the latest news will result in revocation of Imperial’s licences, and the stock should ultimately return to its previous levels.” Imperial shares closed down 135p at £10.92p yesterday.

On Wednesday Mr Mitvol asked the Federal Security Service, the main successor to the Soviet KGB, to investigate allegations that foreign-listed companies overstated Russian reserves to boost their market value. “We are dealing with empty companies,” Mitvol said in an emailed statement.

Imperial said: “The company will defend and protect its legitimate rights.”

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/04/20/cnimperial20.xml

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