Putin hands over to Chechnya an oil company at Kadyrov’s request

Russian President Vladimir Putin signed a decree to transfer all shares of the public joint-stock company Chechenneftekhimprom to the Chechen Republic, which has been under Russian state ownership. Chechen leader Ramzan Kadyrov had asked in 2015 about transferring the company to Chechnya.

Putin’s decree was published on the Internet portal of legal information. It states that the decision has been made regardig the proposal of the Chechen and Russian governments “in order to develop industrial production in the Chechen Republic and increase the efficiency of the use of property” of the company Chechenneftekhimprom.

The decree came into force on September 18, 2018. Chechen authorities have two months to complete the transfer of the shares.

In December 2015, Kadyrov wrote a letter to Putin in which he suggested transferring the Chelyabinsk State Oil Company to Chechnya, which had been operated by Rosneft on a lease basis. Kadyrov emphasized in his letter that “there is practically no significant use of Chechenneftekhimprom,” and that the transfer of the company to regional authorities would not damage Rosneft’s interests.

Putin reportedly supported Kadyrov's proposal but Kadyrov later complained to the president in the spring of 2016 that the government had made no decision on the matter. Rosneft itself proposed another plan for the property transfer, in which Chechnya should receive a controlling stake in Grozneftegaz, a subsidiary of Rosneft that operates on leased assets in Chelyabinsk Oblast, and in other properties in exchange for paying to Rosneft 12.5 billion rubles ($190 million USD).

In April 2017, RBC reported, citing its sources, that Rosneft would continue to work in Chechnya and would not sell its regional assets to the republic, Grozneftegaz being a main asset.

  Russia, Chechnya, Kadyrov, Rosneft