Crude Oil Price by

Oil and Gas Energy News Update

Wednesday, August 31, 2011

BP Moscow Office Raided As Pressure In Russia Rises

- BP Moscow Office Raided As Pressure In Russia Rises

Wednesday, August 31, 2011
Dow Jones Newswires
by William Mauldin, Alexander Kolyandr & James Herron

Russian court officials Wednesday raided the Moscow office of BP in the latest setback for BP in Russia following the collapse of a proposed $16 billion share-swap and Arctic oil exploration deal with state-controlled Rosneft.

The raid comes only a day after Rosneft signed a deal with ExxonMobil to explore the same offshore Arctic fields and work together in the U.S. and other locations.

Russian bailiffs entered BP's Moscow office to examine documents requested in a $3 billion lawsuit filed by Siberia-based minority shareholders in BP's exchange-listed Russian joint venture, TNK-BP Holding, BP spokesman Vladimir Buyanov said.

BP's London office said there are "no legitimate grounds for such a raid" and that the "entity raided has no connection with the process in Tyumen," Siberia, said a BP London spokeswoman. The documents seized by bailiffs "are confidential and have no connection with any shareholder issues," she said.

BP shares were flat Wednesday at 397 pence at 1123 GMT, slightly underperforming the broader U.K index. Some analysts said the Exxon-Rosneft deal was a big negative for the company, but others said the disappointing demise of the venture was already priced into the shares.

The escalating tensions are reminiscent of 2008, when BP fought a bitter battle in TNK-BP over strategic control of the venture that spawned raids by immigration officials and harmed relations between Russia and the U.K.

Dmitry Chepurenko, a lawyer representing TNK-BP minority shareholders, said BP Exploration Operating Company Ltd. didn't comply with a court order to provide documents connected with the abortive BP-Rosneft partnership. Thus the court in Tyumen, where the minority shareholders are based, Monday ordered bailiffs to retrieve the documents from BP Exploration Operating Company Ltd., Chepurenko said in a statement.

BP holds its TNK-BP stake through a unit based outside of Russia, although the staff who work with BP work out of its Russian office, which is also home to BP Exploration Operating Company Ltd. unit, BP's Buyanov said.

Most of BP's approximately 120 Moscow employees left work Wednesday as requested by the bailiffs, leaving mainly legal staff and security to work with the officials, Buyanov added. BP Russia chief Jeremy Huck also left the office and currently remains in Russia, the spokesman said.

TNK-BP minority shareholders are seeking RUB87 billion ($3 billion) from BP due to alleged losses stemming from BP's failed tie-up with Rosneft.

The powerful Alfa-Access-Renova consortium of Soviet-born businessmen successfully blocked the BP-Rosneft deal using a clause in the TNK-BP Ltd shareholder agreement.

Lawyers for the TNK-BP minority shareholders, who live in Tyumen, where TNK-BP Holding is based, said they have no connection with the consortium of billionaires, known as AAR.

BP in 2008 fought a losing battle with AAR for control of TNK-BP, then led by current BP Chief Executive Robert Dudley. The conflict included court battles in Tyumen as well as the removal of BP staff from Russia. The acrimonious dispute was resolved only when BP ceded greater influence over the joint venture to its Russian partners and Dudley resigned as TNK-BP CEO.

In a separate case from the Tyumen arbitration, AAR this month said it has asked a Stockholm arbitration panel to issue a final ruling on whether BP breached the TNK-BP shareholder agreement.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too

No comments:

Post a Comment