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Russia Targets Rospan Executives Despite Settlement

Today the FT is reporting on the continuing persecution of TNK-BP by the Kremlin. The reporter notes that “The attack on TNK-BP – a 50:50 joint-venture – is indicative of growing intolerance of foreign companies playing an equal or majority role in developing Russian energy resources.”

It is interesting that this development comes on the same day that TNK-BP announces the settlement of a $1.4 billion back-tax bill.

EUROPE: Russia moves against Rospan oil executive
By Arkady Ostrovsky in Moscow
Russian prosecutors have opened a criminal case against a senior executive of Rospan, a subsidiary of TNK-BP, the Anglo-Russian oil venture, in the latest move against foreign oil companies.

The case comes two days after the prosecutors asked the government to revoke Rospan’s main licence to large gas fields in western Siberia. The prosecutors did not name the executive, but claimed the company violated environmental and licensing agreements.

Yuri Trutnev, Russia’s minister for natural resources has recently threatened to revoke the company’s licence in Kovykta, one of the largest gas fields in eastern Siberia.

BP is not the only foreign company to have come under pressure from Russian authorities in recent months. Royal Dutch Shell which leads the $20bn Sakhalin 2 oil and gas project and Exxon Mobil, the main operator in the Sakhalin 1 project, have come under fire from Russian environmental agencies in what is seen as a politicised attack.

Analysts say the pressure on TNK-BP is designed to force its Russian shareholders to sell their shares cheaply to Gazprom, the state-controlled gas giant, and to ensure that BP agrees to scrap a clause that prevents Russian shareholders from selling out before 2007.

The attack on TNK-BP – a 50:50 joint-venture – is indicative of growing intolerance of foreign companies playing an equal or majority role in developing Russian energy resources. Rospan, once controlled by Yukos, is TNK-BP’s second biggest gas project, after Kovykta.

Gas production by independent companies is crucial to Russia’s ability to satisfy growing domestic demand and to bolster Gazprom’s stagnant production.