MOSCOW, November 24 (RIA Novosti) – Local police in Russia's North Caucasian republic of Dagestan discovered an illegal oil factory holding about 1.6 tons of oil worth more than 20 million rubles (about $650,000), the local Interior Ministry said Saturday.

The ministry said police in the republic's Derbent Region found the plant, which apparently failed to meet safety requirements, two days ago as part of a search operation.

The plant belongs to a limited liability company, according to the authorities, headed by a 35-year-old villager from the same region.

Police added that he organized the illegal storage and processing of oil.

Oil production is a major industry in Dagestan, where deposits are located along its coast on the Caspian Sea.