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International Herald Tribune: Russian shareholders in BP’s local joint venture deny government pressure to sell up

The Associated Press
Published: November 14, 2006
 
MOSCOW: Russian shareholders in BP PLC’s joint venture in Russia denied Tuesday that they were in talks to sell their stake or that they were under government pressure to do so.

TNK-BP, one of Russia’s top three oil producers, has faced mounting official probes and the threat of license annulments that culminated with the opening of a criminal inquiry against a senior executive last week.

Analysts say the Kremlin is pressuring the Russian billionaires who control nearly half of TNK-BP to sell their stake to either state-controlled gas monopoly OAO Gazprom or state-controlled oil company OAO Rosneft.

Pyotr Aven, a major shareholder in Alfa Group, which owns 50 percent of TNK, told Dow Jones Newswires the shareholders are under no pressure to sell out and described the company’s troubles as “just the bureaucracy of a big state at work.”

Interfax news agency quoted Viktor Vekselberg, chairman of the Renova company, which owns 25 percent of TNK, as denying outright any talks to sell the Russian part of the joint venture.

TNK and BP each own 50 percent of the joint venture.

Under the terms of the deal, signed in 2003 and personally blessed by President Vladimir Putin, Russian partners agreed not to sell their stake for four years, a restriction that ends next spring.

Putin’s top economic adviser, meanwhile, flatly rejected allegations that the government was pressuring TNK-BP’s Russian shareholders to sell their stake.

“I know nothing about plans that TNK-BP shareholders have, and I believe that the state has nothing to do with it and shouldn’t have anything to do with it,” Arkady Dvorkovich told reporters.

In recent months, Western energy companies with major projects in Russia have come under pressure as the Kremlin seeks to increase its sway in the strategic oil and gas sector.

A multibillion-dollar Shell-led liquefied natural gas project in the Pacific island of Sakhalin has faced intense environmental scrutiny and regulators have warned they could pull the venture. Market watchers say the government is seeking to force Royal Dutch Shell PLC to agree to new terms for the deal — which allowed the operators to recoup all their costs before paying royalties to the Russian state — and allow Gazprom into the project.

Shell angered the Russian authorities last year when it said that costs at the Sakhalin-2 project had doubled to US$22 billion (€17 billion). Dvorkovich said that authorities were still considering the revised cost estimate, adding “I don’t think that the requested increase would be possible.”

He denied that the government was trying to reduce foreigners’ share in energy projects in Russia, saying that authorities only want to ensure that everyone abides by the law.

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