Bloomberg: Russia Says BP Spy Charges Not Tied to U.K. Conflict (Update1)

By Henry Meyer

March 21 (Bloomberg) — Russia said charges of industrial espionage filed against an employee of BP Plc’s Russian venture and his brother are not linked to its diplomatic conflict with the U.K.

“We don’t see any link between these events and the current state of U.K.-Russian relations,” Russian Foreign Ministry spokesman Andrei Krivtsov said today by telephone in Moscow. “This matter is strictly the competence of the law enforcement agencies.”

The main successor agency to the Soviet KGB announced the charges yesterday, a day after investigators raided the Moscow offices of TNK-BP, Russia’s third-largest oil producer.

TNK-BP is half-owned by BP Plc and accounted for a fifth of the London-based energy producer’s fourth-quarter oil output. The venture has come under pressure from the Russian state, which is increasing its role in the oil and gas industry, the world’s largest.

Last year, TNK-BP agreed to surrender the Kovykta natural- gas deposit in eastern Siberia to OAO Gazprom after the Russian government threatened to revoke TNK-BP’s license. The sale has been delayed by negotiations over price. State-run Gazprom, the world’s biggest gas producer, has also expressed interest in buying a stake in TNK-BP from its Russian shareholders.

Russia’s environmental watchdog will start a routine check of TNK-BP’s largest oil production unit by the end of April, the Natural Resources Ministry said in an e-mailed statement today. The audit will be supervised by Oleg Mitvol, the official who targeted the Sakhalin-2 project before Gazprom bought control from Royal Dutch Shell Plc.

Ilya and Alexander Zaslavsky, brothers with Russian and U.S. citizenship, were detained on March 12 for trying to obtain classified information that could give foreign energy companies an advantage over Russian rivals, the Federal Security Service, or FSB, said.

The men were released the same day after pledging not to leave the Russian capital, the FSB said.

Ilya Zaslavsky works at TNK-BP and his brother Alexander is president of the British Alumni Club of Russians who have studied at U.K. universities.

Calls to Alexander Zaslavsky’s mobile phone were answered by a recorded message saying that service was temporarily suspended. Calls to Ilya Zaslavsky’s office number were answered by a voice mail. A U.S. embassy spokeswoman, who declined to be identified because of official policy, said the embassy did not comment on consular matters of a legal nature.

The investigation follows the termination of a lock-up period at the beginning of the year during which TNK-BP’s shareholders weren’t allowed to sell stakes in the venture. Billionaires Mikhail Fridman, Viktor Vekselberg and Len Blavatnik own the company together with BP, Europe’s second- largest oil producer. Fridman and Vekselberg have repeatedly denied they plan to sell their stakes in TNK-BP to a state enterprise such as Gazprom.

Ties between the U.K. and Russia have deteriorated to a post-Cold War low since the 2006 murder in London of dissident ex-KGB agent Alexander Litvinenko. After Russia refused to hand over the main suspect in the killing, ex-KGB bodyguard Andrei Lugovoi, the countries each expelled four diplomats last year. Russian authorities in January forced the British Council, the U.K.’s cultural promotion body, to shut all offices outside Moscow.

To contact the reporter on this story: Henry Meyer in Moscow at [email protected]

Last Updated: March 21, 2008 11:22 EDT

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