Thu Aug 12, 2004

WASHINGTON (Reuters) - The Bush administration has complained to Russia about Moscow's clampdown on Russian oil major YUKOS and its driving effect on oil prices, U.S. officials said on Thursday.

U.S. national security adviser Condoleezza Rice, one of President Bush's closest aides, voiced strong concern about the situation last weekend in a telephone call to Dimitri Medvedev, chief of staff to Russian President Vladimir Putin, said a senior administration official.

Similar messages to Russia were expected in coming days from Secretary of State Colin Powell, Commerce Secretary Don Evans and Energy Secretary Spencer Abraham, said the official, who asked not to be identified.

Assistant Secretary of State Elizabeth Jones expressed concerns during a visit to Russia two weeks ago, urging Kremlin authorities to approach YUKOS with consistency and predictability, a State Department official said.

China has also lodged a protest with the Kremlin, the Wall Street Journal reported on Thursday.

Rising energy prices are a major concern for the world economy and the U.S. economic recovery as Bush heads toward a tight autumn election battle against Democratic presidential nominee John Kerry.

YUKOS, one of the world's top oil companies, is in the midst of a multibillion-dollar tax dispute with the Russian government.

Some analysts fear the Russian government, which appears determined to dismantle the oil giant, could seize YUKOS oil units to reclaim billions of dollars in tax arrears identified in court rulings.

The Bush administration is concerned about the effect the Russian government's handling of the YUKOS dispute is having on oil prices and the potential damage to the development of the rule of law in Russia, especially its energy sector.

"We basically (are making) the point that it's important for there to be consistency and predictability in the handling of the YUKOS case and that the lack thereof can adversely impact oil markets," said the State Department official.

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