Oil and Gas

Kremlin may sack head of Russia oil region - paper

MOSCOW, March 10 (Reuters) - The long-serving head of Russia’s oil producing Bashkortostan region may leave his post within weeks, a newspaper reported on Tuesday, but his administration said he had no plans to step down.

If Murtaza Rakhimov is removed, he would be the most powerful casualty yet in a clear-out of regional leaders that analysts have linked to concern in the Kremlin that the economic slump is fuelling social unrest.

The Vedomosti newspaper cited an unidentified source close to the Bashkortostan regional administration as saying that Rakhimov was about to resign after nearly two decades at the helm of the region on the Volga river.

The paper cited an unidentified Kremlin official as saying Rakhimov would go but that the timing was not yet clear.

Russian President Dmitry Medvedev has the power to dismiss regional leaders. He removed four regional governors last month in one of the biggest purges in years.

Analysts said the sackings were a sign of Kremlin nervousness about social unrest, fuelled by a slump that has caused the economy to shrink for the first time in a decade and cost two million people their jobs.

Rakhimov’s administration warned that the strains of the economic crisis meant now was not the time to reshuffle local officials.

“The reports about the supposedly imminent resignation of Bashkir President Murtaza Rakhimov are merely conjecture and rumour and nothing more,” Rakhimov’s chief spokesman said in a statement.

“The republic is one of the regions where economic and social stability is being preserved during the financial crisis and it would be illogical to start personnel changes at this difficult time for the country.”

“Rakhimov will fulfil his responsibilities until the end of his term in 2011,” he said.

Relations between Rakhimov and the Kremlin have soured in the past few years, partly due to bickering over the fate of local oil producer Bashneft BANE.RTS and several major refineries.

The companies were controlled by the regional government but have changed hands several times. Russian industrial group Sistema SSAq.L has been in talks about boosting its stake in the companies to gain a majority stake.

The assets include mid-sized oil producer Bashneft BANE.RTS, refineries Novoil NUNZI.RTS, Ufimsky UNPZI.RTS, Ufaorgsintez UFOS.RTS and Ufaneftekhim UFNC.RTS and retailer Bashkirnefteproduct BANPI.RTS.

A spokeswoman for the Kremlin could not be reached for comment. (Addional reporting by Oleg Shchedrov; Reporting and Writing by Guy Faulconbridge, editing by Mark Trevelyan)