Kadyrov Seeks More Control
Over Chechen Energy Firm

 The Moscow Times
A dvision of The New York Times

Acting Chechen President Ramzan Kadyrov has called for a new economic strategy to make Chechnya financially less dependent on Moscow.

Kadyrov said that if Chechnya could develop its own economy, particularly its oil sector, it could become "a highly profitable donor region," Itar-Tass quoted him as saying at a roundtable in Grozny.

Grozneftegaz, which is 51 percent owned by Rosneft and 49 percent controlled by the Chechen government, currently extracts the republic's oil and gas reserves. Kadyrov complained that although Chechnya has such a large stake in Grozneftegaz, the regional government still has no real say in running the company, the Vremya Novostei newspaper reported Tuesday.

According to official figures published on Rosneft's web site, oil production in Chechnya in 2005 totaled 2.2 million tons, while gas output reached 500 million cubic meters.

"With average annual production increases of more than 240 percent since its creation in 2000, the enterprise has been one of Rosneft's most successful," the web site said.

But Kadyrov said Grozny had not profited from the success of Chechnya's energy sector. Chechen oil and gas reserves are mainly used for export and the profits do not flow back to the republic, he said.

Plowing more of the profits generated by Chechen oil and gas production back into the republic's economy is not a new idea. In April 2004, then-President Akhmad Kadyrov, Ramzan Kadyrov's father, planned to create a new oil company that would give Chechnya a larger share of profits. But the plan did not work then and it is unlikely to do so now because Russian politicians are unwilling to allow Chechnya to become financially independent, analysts said.

Moreover, Chechnya is not alone in not being allowed to retain the proceeds of its energy reserves, said Valery Nesterov, oil and gas analyst at Troika Dialog.