BP under investigation in Russia

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The Independent Online

BP's multi-billion pound joint venture in Russia is facing a fresh investigation by the Russian government, as observers of the country predict the Kremlin is planning a systematic attack on its business elite.

BP's multi-billion pound joint venture in Russia is facing a fresh investigation by the Russian government, as observers of the country predict the Kremlin is planning a systematic attack on its business elite.

A news report, published yesterday in the Russian daily newspaper Vedomosti, said that Russia's secret service is investigating BP's venture TNK-BP to assess whether the country's oil reserves, by law a state secret, have been divulged to foreigner nationals. The business is led by a Briton, Robert Dudley, and it has about 100 foreign employees.

The development is the latest sign of potential trouble at TNK-BP and a further indication that Russian authorities could be unhappy with the venture.

TNK-BP's Viktor Vekselberg told the paper: "We do indeed have a problem, as everything concerning oil reserves falls into the category of state secret. In particular, the chief executive [Mr Dudley] needs to have access to this information. But by law only a Russian citizen can be given access."

TNK-BP called for reforms to make it possible for foreign investors to operate in Russia's oil sector without falling foul of state secrecy laws. "TNK is just one of many companies that have an interest in resolving this issue," TNK-BP said in a statement. At the end of last week, the head of Russia's energy regulator was quoted as saying that production may have to stop at TNK-BP's largest Siberian field because it does not have a government-approved plan.

TNK-BP responded by saying it was engaged in a routine procedure of updating an existing field development plan.

And OAO Saratovneftegaz, a separate TNK-BP business, is being investigated by regional prosecutors into allegations it extracted oil at four fields in the Saratov region without the appropriate licenses.

BP agreed to pay $7.7bn (£4.2bn) in cash and shares for a 50 per cent stake in TNK-BP. Earlier this year, its Russian partners, led by Mikhail Fridman, asked it for cash up front, instead of the agreed three annual instalments of $1.25bn in BP shares - a request which some observers interpreted as showing their fear of an upcoming "de-oligarchisation" campaign. The British company refused.

A study published last week by a think-tank specialising in Russia said that if the Kremlin did decide to rein in the oligarchs, Mikhail Fridman, the head of the Alfa Group business empire behind TNK, would be the most exposed.

Russian Axis, which is based in London, said that the Alpha Group was "unique" in its extensive foreign connections and lobbying efforts, its monopolistic tendencies and its huge concentration of personal wealth.

A spokesman for BP in London said: "The venture is going very well. It is making a good return and improving production. We're very happy with it."

Separately, Roman Abramovich's attempts to undo a takeover of his Sibneft oil group by Yukos received a significant boost yesterday. A Moscow court upheld a previous ruling that annulled shares issued by Yukos to buy 57.5 per cent of Sibneft.

Mr Abramovich, the owner of Chelsea Football Club, had sought the cancellation as a means to unravel the deal. Yukos had sought to keep the transaction intact.

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