The Prosecutor General's Office reported yesterday that criminal cases had been initiated against the heads of Aganeftegazgeologiya (Khanty-Mansi Autonomous Okrug), Ulyanovskneft and the Nafta-Ulyanovsk joint venture. The cases were initiated on the grounds of a crime under paragraph b of part 2 of Article 171 of the Criminal Code (illegal entrepreneurship associated with the extraction of income on an especially large scale), according to a press release from the Prosecutor General's Office. The oil workers are suspected of exceeding the volumes of oil production above the limits established in the license agreements. This article provides for a punishment of up to five years' imprisonment.

According to the Prosecutor General's Office, Aganeftegazgeologiya, in violation of the Subsoil Law, extracted excess oil and gas condensate in the Zapadno-Mogutlorsky and Roslavlsky license areas in 2003–2004. The Prosecutor General's Office estimated the company's illegal profit at 5 billion rubles. According to investigators' calculations, Ulyanovskneft and Nafta-Ulyanovsk earned 2 billion rubles and 700 million rubles, respectively, from illegal oil extraction.

Criminal cases have been opened against the general directors of Nafta-Ulyanovsk and Ulyanovskneft, Igor Yelansky and Viktor Kurochkin, as well as the member of the Federation Council from the Khanty-Mansiysk Autonomous Okrug, Viktor Pichugov, who headed Aganeftegazgeologiya in 1996-2003, a source familiar with the position of the Prosecutor General's Office told Vedomosti. Vedomosti was unable to contact them. Nafta-Ulyanovsk declined to comment, and the deputy general director of Ulyanovskneft, Aleksandr Gorbunov, reported that the company had not received a notification from the Prosecutor General's Office. Pichugov did not receive it either, assures a Federation Council employee close to Pichugov.

RussNeft calls the Prosecutor General's Office's accusations erroneous. The company's statement says that the annual production volume for the group of fields of all three subsidiaries was less than the projected volume. And the income calculated by the Prosecutor General's Office is overstated by 28 times, since it includes taxes paid and production costs and is calculated based on today's world oil prices. In addition, RussNeft completed the deal to purchase 51% of the shares of Aganeftegazgeologiya in 2005, so the Prosecutor General's Office's accusations should be addressed to the previous management, notes RussNeft representative Eduard Sarkisov.

In 2005, three companies extracted about 2 million tons of oil, which is about 10% of RussNeft's output. And the main danger for Mikhail Gutseriev's company is the possible loss of licenses for those areas where violations were found, believes Denis Borisov, an analyst at IFC Solid. So far, similar claims by prosecutors have not led to such consequences, and only Pavel Anisimov, the manager of YUKOS's subsidiary Samaraneftegaz, has ended up behind bars. "But YUKOS is a special case," concludes Kirill Charakov, a lawyer at the company Chastnoe Pravo.

RussNeft gets carried away with production