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March 28, 2008; Page A12

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 he intended.

Blessed by Vladimir Putin at its creation in 2003, BP’s Russian joint venture is now getting the standard Kremlin treatment. This week 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.”

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 wants to escalate the diplomatic war with Britain dating to the 2006 London assassination of Kremlin critic Alexander Litvinenko.

The likelier explanation is that Mr. Putin is kneecapping another private oil company to secure goodies for his cronies. The Kremlin wolves have already swallowed Russia’s largest major, Yukos, and sent its boss Mikhail Khodorkovsky to rot in a Siberian jail. “Tax evasion” was the excuse then. 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 with profits of $6.6 billion in 2006, 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 suggests nothing is likely to change. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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