Russia's Transneft denies $4 bln theft

MOSCOW Fri Jan 14, 2011 3:06pm GMT

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MOSCOW Jan 14 (Reuters) - The head of Russia's oil pipeline monopoly Transneft [TRPRO.UL] denied allegations of a $4 billion embezzlement connected to the construction of a $25 billion pipeline, the biggest infrastructure project in Russia.

In November, activist shareholder Alexei Navalny said that about $4 billion was embezzled during the construction of the East Siberia-Pacific Ocean (ESPO) pipeline, Russia's lifeline to the fast-growing markets of Asia. [ID:nLDE6BS19Q]

Nikolai Tokarev, the head of state-owned Transneft, said on Friday the grounds for Navalny's allegations were inaccurate.

"This figure is not accurate. How did he (Navalny) calculate the damage? He said that he calculated it by extrapolating," Tokarev said in emailed comments to Reuters.

"All the abuse cases during the ESPO construction were discovered by Transneft itself and sent to the Audit Chamber, which valued the damage at 3.5 billion roubles ($117 million)," Tokarev said.

Navalny said he stood by his allegations.

"This is not my wild guess," he said, adding his calculations were made from Transneft documents he posted on a blog.

In November, Sergei Stepashin, the head of Russia's State Audit Chamber, a parliamentary financial watchdog said the matter was under investigation but that the losses were smaller than the $4 billion claimed by Navalny.

Russia's Investigation Committee was not immediately available for comment.

The first stage of the pipeline opened on Jan. 1 and is sending 300,000 barrels of oil a day to China.

Once complete in 2013 the 4,070 km pipeline will be the world's longest. [ID:nLDE6A91GN] (Reporting by Vladimir Soldatkin; editing by Sharon Lindores) ($1=29.91 Rouble)

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