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Financial Times: Moscow ups ante against TNK-BP

By Catherine Belton and Isabel Gorst in Moscow
Published: March 22 2008 02:00 | Last updated: March 22 2008 02:00

Russia’s environment watchdog said yesterday it would investigate TNK-BP’s biggest oil unit days after police raided its Moscow offices as part of an alleged industrial espionage case.

BP’s Russian oil venture said the inquiry was expected and routine. But the news added to fears the UK’s biggest investment in Russia – TNK-BP is half owned by BP and half by a trio of Russian billionaires – could be caught in a diplomatic row between Moscow and London.

The announcement that Oleg Mitvol, deputy head of the Rosprirodnadzor Inspectorate, would lead the inquiry heightened fears the venture was being targeted by the state.

Mr Mitvol led a campaign against Royal Dutch Shell’s Sakhalin-2 oil and gas venture for alleged environmental violations which ended when control went to state-run Gazprom.

TNK-BP, Russia’s fourthlargest oil producer, is reeling from a week in which police searched its offices and those of BP well into Wednesday night, and the security service the next day announced it had detained a TNK-BP employee for spying.

Russia’s Federal Security Service said on Thursday it had detained Oxford-educated brothers Alexander and Ilya Zaslavsky on March 12 on charges of industrial espionage, and said it had found further evidence of this during the raids.

Ilya Zaslavsky worked as an adviser in the regulatory affairs department of TNK-BP. Alexander Zaslavsky was a consultant and was recently elected head of the British Alumni Club, a networking club for Russians who studied in the UK, run under the auspices of the British Council.

The spy charges sparked fears that the diplomatic row was spilling over into the business sector. UK-Russian relations have been at a post-Cold war low since Alexander Litvinenko was killed in London by polonium 210 poisoning in November 2006. Accusations of Russian involvement led to tit-for-tat diplomatic expulsions and a row over the legal status of the British Council.

Copyright The Financial Times Limited 2008

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