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Putin decrees transfer of state stake in CPC to Transneft

MOSCOW, April 28 (RIA Novosti) - Russian President Vladimir Putin has signed a decree to transfer a government stake in the Caspian Pipeline Consortium (CPC) to state-owned pipeline monopoly Transneft, the Kremlin press service said Saturday.

Proposed by the government, the move aims to increase the stake management efficiency, reads the document, which comes into effect on the day of publishing.

In mid-March Transneft CEO Semyon Vainshtok said that the Caspian Pipeline Consortium, which pumps Russian and Kazakh oil to a terminal on the Black Sea, had made a loss of over $5.5 billion, and called for higher oil transit tariffs. Commenting on the idea behind the plan for transferring Russia's 24% in the company to Transneft, Vainshtok said: "The owner, the Russian government, has made a decision to transfer its stake in the CPC to Transneft to profit from the project."

Apart from Russia, the CPC's shareholders are Kazakhstan, which has a 19% stake, and the Sultanate of Oman with a 7%. The consortium also includes such private companies as Chevron Caspian Pipeline Consortium Company (15,0%), LUKARCO B.V. (12,5%), Rosneft-Shell Caspian Ventures Limited (7,5%), Mobil Caspian Pipeline Company (7,5%), BG Overseas Holding Limited (2,0%), Agip International (N.A.) N.V. (2,0%), Kazakstan Pipeline Ventures LLC (1,75%) and Oryx Caspian Pipeline LLC (1,75%).

The governments of Russia, Kazakhstan and Oman established the CPC in 1992. In 1996 the consortium was reorganized, with eight international oil producers admitted to the project.

The CPC oil pipeline, which is 1,510 km (938 miles) long, was commissioned in October 2001, and now pumps 30 million tons (220.5 million bbl) a year.

The Russian Federal Property Management Agency holds the Russian stake in the project, and Transneft is 75% state owned.

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