BP could be forced to cut production at its Russian subsidiary TNK-BP after a small Moscow brokerage with ties to one of its primary shareholders filed several lawsuits to keep 148 top engineering and technical staff from returning to work.
Tetlis, a brokerage run by two former executives of Alfa Group, the investment group that holds a 25 per cent TNK-BP, filed the first of three suits in a Siberian court on 18 April, one week after it bought a minority stake in the company. It argues that the high salaries that TNK-BP must pay to the seconded BP employees are essentially a special dividend for BP at the expense of the other investors in the group.
Tetlis filed two other suits in Moscow this week, seeking to declare null and void the 2003 agreement that sets out the parameters for their employment. A BP spokesman said yesterday that production cuts "were a possibility" if it was unable to resolve the situation and fears are growing that BP could be bullied into selling down its stake in the business. That would be highly damaging for BP, which derives nearly a quarter of its global production and 13 per cent of its earnings from the group.
The employees in question, most of whom are responsible for high-level engineering, development and other critical skills, have been unable to work for a month and a half after Russian authorities declared at the end of March that their visas were no longer valid. The visa issue had been largely resolved until Tetlis filed its suits. "We don't believe this case has any merit and we intend to fight it," the BP spokesman said.
The episode is the latest in a series of problems that have arisen in recent months. TNK-BP's offices were raided by Russian authorities earlier this year, and one of its employees was arrested for alleged espionage. There is no evidence that Alfa, which is controlled by billionaire Mikhail Fridman, is involved with Tetlis's actions. Viktor Vekselberg's Renova and Access Industries, controlled by Lev Blavatnik, are the other investors who between them own the other half of TNK-BP.
The legal action comes against a backdrop of rising tensions between BP and its partner investors, according to sources close to the situation. BP has plans to invest billions in a capital investment programme to increase production. The Russian investors are thought to be seeking higher dividends.
Also in the background is Gazprom, which is in negotiations to buy TNK-BP's stake in the Kovytka gas field in eastern Siberia. The talks have been dragging on for months. TNK-BP is one of the few oil and gas groups in Russia in which the state does not own a stake, and speculation is increasing that BP could be forced to sell a stake in the venture to the monopoly gas group. Tetlis is run by Aleksandr Tagayev, who held various positions within the Alfa group, including as a sales manager in the late 1990s at Alfa Bank, and Vadim Zykov, who worked at Alfa Investment Management during the same period.
The first case will be heard by a Siberian court in Tyumen on 20 May.