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Doubts over BP’s future in Russia escalated last night after authorities in Moscow refused half of the work permits requested by TNK-BP.
It means that more than 70 foreign employees of TNK-BP, including the BP-backed chief executive Robert Dudley, may soon have to leave Russia unless they can secure new visas quickly.
The potential departure of Mr Dudley as well as the chief financial officer and others from the executive team would in effect leave control of the company in the hands of their Russian partners.
TNK-BP, which was formed in 2003, has come under sustained attack from government bodies in Moscow since the corporate war erupted between BP and its Russian partners Mikhail Fridman, Viktor Vekselberg, Len Blavatnik and German Khan.
“We have been working with the Russian authorities and within Russian laws since April to resolve this issue, and will continue to do so,” Mr Dudley said last night. “However, we have been given no grounds to believe these issues will be resolved before senior international staff and their families will have to leave Russia. Unfortunately, this now appears very likely.”
TNK-BP is the target of a tax investigation and a separate inquiry into alleged violations of immigration and employment law. Mr Dudley was summoned for a five-hour interrogation by Interior Ministry police this month as part of the tax inquiry. TNK-BP’s headquarters were raided by the federal security service after an employee was charged with industrial espionage.
The Russian shareholders’ AAR consortium have accused BP of limiting TNK-BP’s international expansion and employing too many foreign secondees from BP, accusations rejected by the British company.
AAR consortium has also demanded the dismissal of Mr Dudley, accusing him of running the company solely in the interests of BP.
But BP has repeatedly said that it is absolutely committed to Mr Dudley.
Mr Dudley applied to the Moscow authorities to extend work permits for a total of 146 international specialists at TNK-BP but the city on Monday cleared the request for only 71 specialists. It was reported last night that billionaire German Khan, one of the Russian shareholders, had requested that the quota on international specialists be lowered to 63 from next year.
Yevgeny Chernetsov, deputy chairman of the Moscow official committee to which the proposals were made, said the committee had received two proposals from TNK-BP. He added that there was no evidence the company was sticking to an earlier agreement to reduce gradually the number of foreign workers in the joint venture.
Suspicions persist that Russia’s third-largest oil company is the target of a Kremlin-backed campaign to force it to cede control to a state-owned rival such as Gazprom.
TNK-BP has accounted for most of BP’s growth in recent years and its creation was a major coup for BP’s former chief, Lord Browne of Madingley.
Escalation of the TNK-BP conflict will raise further concerns about Russian oil production, which has been shrinking this year. Fears over Russia’s output have contributed to the surge in oil prices. Last week, Peter Mandelson, the European Trade Commissioner, accused Russian shareholders in TNK-BP of menacing behaviour. He said the conflict between BP and the quartet of Russian billionaires who own half of the company was “primarily an issue between shareholders”. But he said it raised questions about Russia’s relationship with the European Union and with international investors.
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Russia is a law unto itself. Suspicious, greedy and arrogant, the oligarchs who run the place as their own private fiefdom will do as they please, and any international company that believes otherwise is on a hiding to nothing.
Russian oil production is declining - period.
C Smith, Norwich, UK
This is so common amongst developing countries. They are very happy to accept huge financial investment and expertise from outside countries, but then in effect nationalise the industry thereby getting it all for nothing. They then have the cheek to say they have been exploited by Western capitalist
pw, manchester, uk
Corrupt, criminal, communist - Putin's modern day Russia.
Rob, Olney, England
Welcome to Russia.... Where Lords & Sir are as useful as an ashtray on a motorbike..... Twenty years ago if the shoe was on the other foot the british or American government would do the same thing !!
It looks like the brits do not have a good memory......
John, London, Uk