Robert Amsterdam was quoted in today’s edition of the Independent:
BP accused of giving in to Kremlin ‘extortion’ By Saeed Shah Published: 24 March 2007 BP was accused of giving in to “extortion” from the Kremlin yesterday after the oil giant bid $9bn (£4.5bn) to buy a further stake in the Russian state-controlled energy group Rosneft. The British company’s participation in the highly controversial auction of assets that used to belong to the bankrupt oil company Yukos emerged on the day that BP’s current chief executive, Lord Browne, and his successor, Tony Hayward, went to meet the President of Russia, Vladimir Putin. The Russian government is running an auction of the remaining assets of Yukos, which used to be controlled by the jailed tycoon Mikhail Khodorkovsky. Those Yukos assets include a 9.4 per cent stake in Rosneft. Mr Khodorkovsky has accused the Kremlin of stealing Yukos from him – analysts believe that Mr Putin moved against him because he started backing the political opposition. Robert Amsterdam, Mr Khodorkovsky’s lawyer, said that BP’s participation in the Yukos auction would lend legitimacy to the process and promote the British company’s interests with the Kremlin. “They [BP] are doing it for access. Everyone knows that auction is fixed and that BP won’t win,” Mr Amsterdam said. BP, through its Russian joint venture TNK-BP, is currently in delicate negotiations over its giant Russian gas field Kovykta with the state-controlled energy group Gazprom. Officials are threatening TNK-BP with revoking its Kovykta licence. It is thought that the development of Kovykta will only be allowed to go ahead after Gazprom is given a large share of the project. Mr Amsterdam said: “BP is rewarding the Russians for taking hostages. First they took Khodorkovsky. Now they’re holding Kovykta. It is extortion … We are walking into the Munich of energy appeasement.” Last summer, BP paid $1bn to take a 1 per cent stake in Rosneft in its London flotation, again helping to legitimise the process – Rosneft’s biggest asset was Yuganskneftegaz, which was taken from Yukos in another forced “auction” in 2004. BP yesterday insisted that it had made a genuine bid in the new auction, which is scheduled for Tuesday next week. It is thought that BP has put up a deposit of $1.5bn. “We’re going into it seriously,” Peter Henshaw, TNK-BP’s vice-president for communications, said. “It’s about building stronger relationships and acquiring a strategic asset.” The 2004 auction of Yuganskneftegaz assets turned into a farce after it emerged that the only and winning bidder was a company no one had ever heard of, which was registered in a provincial town. Yuganskneftegaz was quickly passed on to the ownership of Rosneft – that is, state control. This time, analysts believe, the Kremlin has put pressure on respected international companies to participate in the auction – Italy’s ENI is expected to bid for some assets. TNK-BP will be bidding against Rosneft itself for the Rosneft stake. Some conspiracy theorists speculated that TNK-BP would actually win the auction but that would mean that, later, the Russian businessmen in the joint venture would be replaced by Rosneft. The former shareholders in Yukos, represented in a holding company Menatep, have vowed to sue any companies buying its assets. Tim Osborne, director of Menatep, said: “There’s a lot of risk attached to any Western company getting involved in these auctions. Because they’re in receipt of stolen goods, they can never get good title.” At the meeting yesterday, President Putin, Lord Browne and Mr Hayward discussed the possibility of Russian energy companies co-operating with BP in countries outside Russia, as well as “various questions connected with the company’s activities in Russia,” according to the Kremlin spokesman Dmitry Peskov. Mr Putin noted the successes of TNK-BP, Mr Peskov said. “The company is developing actively in Russia, where its reserves, production levels and profit are growing,” Mr Peskov quoted him as saying.