Publication: Monitor Volume: 7 Issue: 36

Deputy Prime Minister Viktor Khristenko has announced that at least 17 billion rubles (around US$607 million) will be spent to rebuild the Chechen economy this year. The lion’s share of these funds will go to rebuilding the republic’s petrochemical industry. Khristenko noted that the republic’s oil company, Grozneftegaz, will be given full access to the export pipeline during the first quarter of this year. The Russian government’s commission on rebuilding the Chechen economy predicts that 72,000 tons of oil will be extracted in Chechnya during the first three months of this year (Novaya Gazeta, February 19; see also Chechnya Weekly, February 21).

In the meantime, however, the Russian authorities, as during the 1994-1996 Chechen war, remain powerless to prevent the illegal extraction of oil in Chechnya. According to Novaya Gazeta, some 800,000 tons of oil are being extracted illegally in Chechnya–that is, more than three times the amount forecast by the government. Illegal factories for producing gasoline operate today throughout Chechnya. The Monitor’s correspondent can confirm that illegal gasoline is sold throughout the republic at a price two times lower than that established by the government. As Novaya Gazeta suggested, in reality no one plans to reestablish the republic’s oil industry: According to the paper, both Russian military leaders and Akhmad Kadyrov, head of the pro-Russian administration in Chechnya, are profiting from the illegal oil production. Novaya Gazeta predicted that the money earmarked for Chechen construction will be simply stolen and then written off as losses resulting from combat, as happened in August 1996, when rebel forces unexpectedly retook Djohar (Novaya Gazeta, February 19).