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Head of Embattled Russian Oil Firm Seeks Support from US Congress


The head of the Russian oil company Yukos says Russia is trying to dismantle his firm, and he is asking U.S. lawmakers to protest Moscow's actions.

In an appearance before the U.S. Senate Foreign Relations Committee, Yukos' chief executive officer, Steven Theede, accused the Russian government of a deliberate campaign to bankrupt his company.

"The rules have clearly changed," he said. "For reasons known only inside the Russian government, it seems to have reversed its commitment to privatization and chosen instead to increase the role of the state," he said. "As a result, the whims of those in power have replaced the guarantees of due process, adherence to the rule of law, and protections for the rights of shareholders and property owners."

Mr. Theede said the market value of Yukos has fallen to $2 billion from $40 billion in six months.

The Russian government seized control of Yukos bank accounts late last year, and the firm's largest subsidiary ended up in the hands of a state-controlled oil company through a disputed auction. Yukos is seeking to challenge that auction in a U.S. bankruptcy court in Houston, Texas.

Moscow says its efforts were aimed at cracking down on fraud and tax evasion.

But observers say the pursuit of Yukos was an effort to destroy the political ambitions of its former owner, the now imprisoned Mikhail Khodorkovsky.

Mr. Theede says the United States has a direct interest in the resolution of the Yukos matter because of the large number of Americans who have invested in the company, and because the United States is the world's largest oil consumer.

Observers say the Yukos case is just one example of how the Kremlin, under President Vladimir Putin, has moved to recapture influence in the energy sector.

Earlier this month, Moscow limited the sale of natural resource licenses to Russian companies, a move that angered Western firms eager to do business in Russia.

The chairman of the Foreign Relations Committee, Senator Richard Lugar of Indiana, expressed concerns about Russia's efforts to limit privatization and promote nationalization of key sectors of the economy.

"Investment and other economic links that would help Russia diversify its economy, improve its trading relationships are far less likely to appear if foreign companies cannot count on a fair and consistent business climate and legal system," he said.

Senator Lugar said he hopes President Bush will raise these concerns when he meets with Mr. Putin in the Slovak capital, Bratislava, on February 24.

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