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Report: Two Russian regions suing oil giant Total for billions

Business Materials 10 April 2008 16:51 (UTC +04:00)

(dpa) - Two Russian regions have taken French oil giant Total to court to recover up to 170 billion dollars they claim the company owes them for breaking a contract, the daily Le Figaro reported Thursday.

According to the report, in 1990 - when the company was known as Elf - its chief Loik Le Floch-Prigent wanted to take advantage of the break-up of the Soviet Union to exploit oil in some of its regions.

Two years later, an agreement was signed between then-French president Francois Mitterand and his Russian counterpart, Boris Yeltsin, granting Elf the right to drill.

According to authorities from the two regions, Volgorad and Saratov, a convention was signed in 1993 giving Elf exploitation rights for 50 years and stipulating that profits would be split 50-50 between the company and the regions.

But Elf never took advantage of the agreement. The regions now claim that they each lost between 33 and 85 billion euros'worth of potential profit as a result.

Le Figaro reported that, as a result of the claim, which was filed in August 2006, the public prosecutor of Nanterre, north of Paris, has opened an investigation against unnamed parties for breach of trust.

Total has refused to comment on the case.

Reportedly, the case was instigated by an 88-year-old businessman, Andre Guelfi, who is demanding 3 per cent of the amount claimed, which he wants to share with the Russian Olympic Committee.

Guelfi was sentenced to three years in prison for his part in a broad bribery affair that also involved Le Floch-Prigent and ultimately led to the renaming of the company.

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