Global Processing

Confusion Over Russian Cops'' BP Visit

March 24, 2008
According to CNN, Russian police visited offices of BP PLC and its joint venture recently in what some commentators saw as a possible part of a state-orchestrated campaign to obtain lucrative energy assets.

A group of police investigators showed up at the offices of BP''s joint venture, TNK-BP, and later called at the Moscow offices of BP itself.

Officials at the Federal Investigative Committee gave conflicting information regarding the purpose of the visit. First they said that investigators seized some documents at TNK-BP as part of an investigation into the oil company Sidanco, which became part of TNK-BP in 2003. Later, however, they said the visit was linked to a probe against unidentified managers of TNK-BP.

In London, a spokesman for BP said the company was baffled by the visits.

He said police arrived at the TNK-BP offices in the morning, Moscow time, and the BP offices were visited in the evening. No arrests were made.

Spokesmen for TNK-BP were unavailable for comment.

TNK-BP came under massive official pressure last year, when government regulators said it was not meeting production targets at a giant Siberian gas field and threatened to withdraw its license.

The Kremlin has ratcheted up pressure on foreign energy companies in recent years as part of its effort to consolidate control over the country''s largest and most important hydrocarbon deposits.

BP agreed last June to sell its stake at the Kovykta gas field to state gas monopoly OAO Gazprom, but talks on the price have continued.

The online gazeta.ru said in a commentary that police visits to BP and its joint venture could be part of Gazprom''s efforts to pressure the British oil company into lowering the price. It added that another state energy company, OAO Rosneft, could also be interested in buying some of TNK-BP assets.

Searches and document confiscations accompanied a massive government crackdown on Yukos oil company which ended with an eight-year prison sentence for its founder, Mikhail Khodorkovsky, and the transfer of its assets into state hands.

Police visits to BP (BP) and its joint venture come at a time when relations between Russia and Britain are at a post-Cold War low, badly frayed by the 2006 poisoning death in Britain of former KGB agent Alexander Litvinenko and Moscow''s refusal to extradite the sole suspect in his death.