The Russian government should move ahead with privatization of the country's major energy assets to improve the investment climate, Vedomosti business daily reported on Wednesday, citing Economic Development Minister Elvira Nabiullina.

Privatization plans are a key element in forming an investment-friendly economy based on clear market rules, not administrative leverage, Nabiullina told Prime Minister Vladimir Putin in a letter whose text was obtained by Vedomosti. Financial market instability increases competition for investment, competition that will be difficult to withstand without a privatization program.

Last December, Deputy Prime Minister Igor Sechin argued against selling state stakes in oil major Rosneft (25 percent minus one share), oil pipeline monopoly Transneft, oil company Zarubezhneft as well as in Federal Grid Company (4.11 percent minus one share) and hydropower holding RusHydro (7.97 percent minus one share), saying privatization might lead to problems in those companies' projects.

The Russian government approved in late 2010 an ambitious privatization program for 2011-2013, including the top ten state-owned assets, in a move to bring an extra 1 trillion rubles ($33 billion) to state coffers, but later had to postpone its plans due to the unfavorable market situation.

Sergei Guriyev, the rector of Russia's New Economic School, told the paper that Nabiullina's arguments were sound.

"(The privatization) will also be profitable for country's budget as the energy companies will be expensive given high oil prices," Guriyev said, adding that selling state stakes will raise the efficiency of management.