Fridman’s Challenge To The State?

fridman1-167x111.jpgThe BP-Rosneft deal has certainly rocked a few boats.  It is reported today that TNK, BP’s partners in Russia, have sought to block the deal with an injunction filed in a London court, on the basis that it contravenes two points of their agreement, despite reassurances from Deputy Prime Minister Igor Sechin.  The FT‘s Beyond Brics blog has a particularly intriguing analysis of the antics of TNK partner and Alfa Group chieftain Mikhail Fridman, who has proved to be vociferous in his opposition to the plan (and can be a formidable enemy, as BP’s Bob Dudley will remember from 2008).  But BP is not, the only force the billionaire is willing to take on:

But the oligarch’s real fight now is not with the British company but with the Russian state. Putin will not take kindly to such an open challenge. Igor Sechin, Rosneft chairman and deputy prime minister, said in Davos on Thursday that BP was acting within the law in terms of its planned share swap and Arctic exploration deal with Rosneft. TNK-BP’s claims would be settled in a “legal way”.

Putin may not care too much about Fridman’s foreign battles in general. But with Russia right now on a charm offensive to woo foreign investment, with president Dmitry Medevedev opening the Davos event on Wednesday, the oligarch’s latest fusillades come at an awkward moment for  the Kremlin.

Master of intrigue that he is, Fridman will have worked all this out long ago. So why is he taking such risks, going public with his gripes about the Putin state?  One theory is  that the Alfa bosses sense that Putin is moving against them and have nothing to lose by speaking out and politicising their concerns before they suffer further defeats. In oil and gas, in particular, Putin has in recent years favoured state companies headed by Rosneft and Gazprom, at the expense of private operators in the award of new licences etc.

A second possibility is that by escalating the dispute over BP-Rosneft, Fridman might hope to extract concessions elsewhere, for example over the Bank of Moscow. However, given the divisions in Russian officialdom it is not clear why the Moscow city officials and the VTB bosses should give ground just because Sechin and co at Rosneft are making gains. Putin rules not by fiat, but by managing the different politico-bureaucratic tribes.
Finally, different elements in the Moscow elite are already jockeying for position in advance of the 2012 presidential elections.  It could be that Fridman is trying to exploit these differences for his own benefit.

In other words, we don’t really know.  Fridman has been in this game so long it would be rash to bet against him. But Putin has shown that when he needs to chew up an oligarch, he will.

Read all here.