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March 26, 2008

A senior executive at TNK-BP told us a few months ago that the oil company was “a poster child” for foreign investment in Russia. So it is turning out to be, only not in the way that he intended.

Blessed by Vladimir Putin at its creation in 2003, BP’s Russian joint venture is now getting the standard Kremlin treatment. Yesterday a “bureaucratic” visa problem forced the British company to send home 148 expatriate workers. Meanwhile, the Interior Ministry launched a “tax evasion” probe into a TNK-BP unit. And last week, the (renamed) KGB raided the oil company’s Moscow offices and arrested a Russian employee for “industrial espionage.”

How subtle. Whatever is behind the shakedown of the only large oil company partly owned by foreigners, recent history suggests that visa snafus, back taxes and “espionage” have nothing to do with it. Maybe the Kremlin wants TNK-BP to lower the price on the large Siberian gas field the company was pressured last year to sell to state monopolist Gazprom. Or perhaps it’s escalating a diplomatic war with Britain dating back to the 2006 assassination of Kremlin critic Alexander Litvinenko.

The likelier explanation is that Mr. Putin is kneecapping another private oil company to secure the goodies for his cronies. Kremlin wolves swallowed whole Russia’s largest major, Yukos, and sent its boss Mikhail Khodorkovsky to rot in a Siberian jail. “Tax evasion” was the excuse. A year ago, Royal Dutch Shell got into trouble for “environmental” infractions and was forced to sell half its oil development on Sakhalin Island to Gazprom. TNK-BP, Russia’s fourth-largest oil producer, is a tasty prize.

In six weeks, Gazprom Chairman Dmitry Medvedev takes over the nation’s presidency from mentor Mr. Putin, who’ll become Prime Minister. The TNK-BP case sends a useful reminder: Nothing is likely to change.

See all of today’s editorials and op-eds, plus video commentary, on Opinion Journal. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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