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Financial Times: Urals Energy sure on reserves report

By Ed Crooks in London and Catherine Belton in Moscow
Published: May 1 2007 03:00 | Last updated: May 1 2007 03:00

Urals Energy, the oil and gas company, has said it is confident it will not run into trouble with the Russian government, in spite of its report yesterday of a 400 per cent increase in its proven and probable reservesto 577m barrels of oilequivalent.

Russia’s environmental watchdog agency said yesterday it was waiting for the results of a probe by the FSB, the security service, into whether several London-listed companies operating in Russia, including Urals Energy, were misreporting their reserves.

A spokesman for the Rosprirodnadzor agency said the FSB was investigating whether figures reported by some small and mid-sized companies corresponded with reserves tallied in state files. “We shall know what type of company Urals Energy is in three weeks,” said Rinat Gizatullin, the spokesman.

The agency is run by Oleg Mitvol, the Russian official who led the state campaign over alleged ecological violations against Royal Dutch Shell’s Sakhalin-2 venture. Two weeks ago he accused Aim-listed Imperial Energy of misreporting its reserves.

However, Urals said yesterday that it did not expect to give the Russian authorities any cause for concern.

Even after the latest increase in its proven and probable reserves, it is re-porting a lower figure to investors than the estimate filed with the ministry using Russian standards.

Urals’ shares closed up 37½p at 425p.

Mr Mitvol said other companies being investigated included Celtic Resources Holding Company, Victoria Oil and Gas and Bema Gold.

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