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Reuters: Minister raises BP, Shell Russia concerns

By Douglas Busvine
08.02.2007

MOSCOW (Reuters) – Britain’s trade minister urged Russia on Thursday to respect the sanctity of foreign investments, saying he had raised concerns over BP’s and Shell’s Russian ventures at talks in Moscow.

“I made it very clear that British companies coming here need to have legal certainty, and need to know where they stand,” said Alistair Darling, Trade and Industry Secretary in Tony Blair’s Labour government.

Darling told a news briefing he had discussed concerns over BP’s investment in Russia’s third-largest oil firm TNK-BP on Wednesday, when he met Russia’s finance, economy and energy ministers.

Industry sources say TNK-BP’s Russian partners — Mikhail Fridman, Viktor Vekselberg and Len Blavatnik — are under pressure to sell out to a state-owned concern. Gas monopoly Gazprom is widely tipped as the likely buyer.

Darling also said investors were worried that Royal Dutch Shell had been forced to cede control of Sakhalin-2, the world’s largest liquefied natural gas project in Russia’s far east, to Gazprom.

Shell and its Japanese partners, under what many believe to have been officially sanctioned pressure from Russian environmental regulators, agreed in December to cede majority control of Sakhalin-2 for $7.45 billion (3.78 billion pounds).

“There was an initial backlash following Sakhalin and they (the Russians) are aware of that,” said Darling.

Commenting on BP, he added: “What we have said is that people are now apprehensive, and it would be far better if these matters were settled in accordance with established laws.”

Gazprom has also declared an interest in Centrica , one of the largest British energy utilities, fuelling concerns that its thrust to acquire distribution assets in its export markets could boost Europe’s already-heavy dependence on Russian gas.

Darling said that Gazprom had not made a formal bid approach to Centrica, but said if one were to come it would have to have a purely commercial — not a political — justification.

“No move has been made by Gazprom,” Darling said.

“We welcome investment from overseas, but you’ve got to play by the rules … Politics and commerce don’t mix.”

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