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Chief executive grilled in Russian siege of BP logo

Chief executive grilled in Russian siege of BP

· Another problem for oil company’s joint venture 
· Billionaire shareholders ‘trying to get a bigger offer’

BP’s woes in Russia deepened yesterday when the head of the company’s joint venture, TNK-BP, was called in for a grilling by tax officials, in a move apparently instigated by the firm’s Russian shareholders.

Robert Dudley, TNK-BP’s chief executive, was summoned for questioning by the interior ministry as part of a criminal investigation into alleged large-scale tax evasion, the company said yesterday.

TNK-BP described the questioning as routine. But there is little doubt that it continues the battle between BP and the firm’s Russian shareholders, who each own a 50% stake in the company.

Last week the venture’s three Russian co-owners – Mikhail Fridman, Viktor Vekselberg and Len Blavatnik – demanded Dudley’s resignation. They accused him of snubbing their interests and running the firm as if it were a BP subsidiary.

BP’s chief executive, Tony Haywood, rejected their demand. Haywood – who is attending the St Petersburg economic forum today and tomorrow – issued a statement expressing his “full support” for Dudley, who has refused to resign.

The crisis erupted openly two weeks ago, when Dudley acknowledged serious differences with his Russian shareholders. The billionaires had called for TNK-BP – Russia’s third-biggest oil firm – to expand internationally, even if this brought it into conflict with BP’s interests.

Yesterday analysts said there was little doubt the Russians had arranged the summons by the interior ministry as a way of piling more pressure on Dudley. The tactic follows a raid by the FSB – Russia’s post-Soviet spy agency – on the firm and visa problems for its foreign experts.

“Obviously there is a conflict,” said Artyom Konchin, an oil and gas analyst with the Aton brokerage in Moscow. “Apparently the Russian shareholders can use certain measures and administrative resources, and create problems for BP with bureaucracy and related issues. They are big enough to do that.”

Dudley was summoned to discuss tax issues at TNK from 2001 to 2003, before the joint venture was created, TNK-BP said. The interior ministry said last week it was investigating suspicions of tax evasion by Simon Kukes, TNK’s president between 2001 and 2003.

Industry observers believe that the Russian partners are preparing to sell their stake to Gazprom or Rosneft. “They are trying to get a bigger offer from BP,” Konchin added. “This is all about money.” Asked whether BP had mishandled the escalating dispute, he said: “There isn’t that much they could do about it.”

The Kremlin has refused to wade into the row. Yesterday Igor Sechin, Russia’s deputy prime minister and one of the Kremlin’s most powerful figures, said the government would not get involved. “This is the shareholders’ internal affair,” he said. “They must solve this issue within the company.”

Last weekend Vladimir Putin claimed that he had warned the Russian and British partners when the company was formed in 2003 that their 50-50 deal would create problems. He told Le Monde that the arrangement was doomed to failure because “there needs to be a boss”. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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