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The Independent: BP keeps staff off work in Russian visa row

By Danny Fortson, Business Correspondent
Wednesday, 26 March 2008

Fresh doubts have surfaced about the security of BP’s business in Russia after its subsidiary TNK-BP told nearly 150 workers not to go to work after Russian authorities warned that their visas were no longer valid.

The development is the latest in a string of worrying incidents to have hit BP’s operations in the country, which accounts for more than a fifth of its global oil production. Last week, a junior TNK-BP worker and his brother, who worked as a consultant to the company, were arrested by state security officers and charged with industrial espionage.

The Russian Interior Ministry warned the case may involve large-scale tax evasion by Sidanco, one of the companies brought together to form TNK-BP in 2003.

Meanwhile, the office of Oleg Mitvol, deputy head of the natural resources ministry, confirmed last week it would investigate TNK-BP’s biggest oilfield, Samotlor. Mr Mitvol’s threats last year to strip BP of its licence to operate the Kovykta field preceded BP’s decision to sell its stake in its prize asset to Gazprom, the state-owned oil and gas group. The alleged environmental violations he uncovered at the Sakhalin 2 project led Royal Dutch Shell to sell part of its holding last year, also to Gazprom.

The Samotlor review is understood to have been scheduled long ago under the organisation’s programme of reviewing operations of all major fields every two years. It was last reviewed in 2005. A BP spokesman declined to comment. TNK-BP did not return calls seeking comment.

The flurry of activity comes amid rising tensions between foreign companies and the Kremlin. The Duma last week passed a Bill to limit foreign ownership of assets in 42 industries the government has deemed “strategic”. Mineral resources are among the sectors named in the Bill. The Bill requires approval by the upper house and the presidential OK, which are expected.

The investigations from Mr Mitvol’s office and the state security forces have heightened fears the moves could be the opening gambit that would see the Russian state muscle its way into a major stake in TNK-BP. The company’s ownership is split evenly, with about half belonging to BP and the same amount to a trio of Russian oligarchs. Based on the market value of shares – representing the remaining 6 per cent of the company – trading in Russia, the company is worth £13bn.

The Association of European Businesses in the Russian Federation, which represents foreign companies operating in the country, is leading the lobbying charge to change the visa rules, which came into effect last year. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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