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Ukraine govt. backs resignation of Naftogaz head

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KIEV, May 11 (RIA Novosti) - Ukraine's government Thursday recommended that the country's president accept Oleksiy Ivchenko's request to relieve him as board chairman of national oil and gas company Naftogaz, the prime minister's press secretary said.

Valentin Mondriyevskiy said Ivchenko had filed to leave his post after winning a seat the Supreme Rada, Ukraine's parliament, in March.

Ivchenko, also head of the Congress of Ukrainian Nationalists, ran for parliament in the March 26 elections within pro-presidential bloc Our Ukraine, which won 81 seats.

Naftogaz press secretary Eduard Zanyuk confirmed the resignation Thursday, saying Ivchenko had chosen to focus on his parliamentary duties.

"Oleksiy Ivchenko made a voluntary decision to leave the post of board chairman in the company and filed an application. This was his decision," the company said.

Earlier on Thursday, Ukrnaft shareholders made a decision to relieve Ivchenko as chairman of the oil company's supervisory board.

Ivchenko was appointed board chairman of Naftogaz in March 2005.

Naftogaz, which accounts for 10% of the state budget's revenues, is facing serious financial problems. Ivchenko said in late April the company's losses in 1Q06 had hit $500 million.

He clashed with the Finance Ministry, which rejected Naftogaz's proposal to raise gas prices for households by 60% starting from July, and said the company's tax arrears stood at $118 million.

The Finance Ministry demanded instead that Naftogaz scale back spending on a number of foreign projects and cut investment in production in Ukraine.

Ivchenko accused the government of reluctance to address problems facing the company, saying such an approach was "tantamount to a crime."

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