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BP staff thrown out by Moscow but Russia refined enough for Sibir Energy

 

telegraph.co.uk

BP staff thrown out by Moscow but Russia refined enough for Sibir Energy

By Russell Hotten, Industry Editor

Last Updated: 2:25am BST 01/07/2008

Half of the 150-strong foreign workforce are being forced out of BP’s Russian joint venture, TNK-BP, in an escalation of the power struggle at the oil group.

BP and the four Russian billionaires who own half the company have clashed over TNK-BP’s strategy, with the Russian shareholders accusing BP of limiting global expansion and employing too many foreigners.

  A worker stands at Priobskoye oil field, some 100 km from the Siberian town of Khanty-Mansiysk
Staying cool: Sibir Energy prospers from its oilfields in Siberia

Yesterday, Moscow refused work permits for about 75 staff. BP described the ruling as “utterly disgraceful”.

TNK-BP chief executive Robert Dudley said the company had been “working with the Russian authorities” to secure visas but that it “now appears very likely…foreign staff will have to leave Russia”. 

This comes hot on the heels of a more benign assessment by another energy company operating in the country.

Henry Cameron, chief executive of Sibir Energy, the Aim-listed oil producer that will enter the FTSE 100 if it moves up later this year as planned, believes the investment climate in Russia has never been more stable.

Mr Cameron said yesterday his business has prospered because it spotted early on that Moscow would want to take back control of Russia’s privatised energy assets.

He said: “In our view, the investment environment in Russia for Sibir has never been more stable or predictable. One of the fundamentals by now must be clear to all: the Russian government wants to see Russian control over its natural resources through state-owned companies or Russian-owned entities.

“Sibir anticipated these developments many years ago and has intentionally pursued a strategy of majority Russian ownership.”

  • More on oil
  • Around 67pc of Sibir shares are now in Russian hands, including 18pc held by the City of Moscow and 47pc by businessmen in the country.

    After yesterday’s record profit figures, which sent the share price soaring 10pc, Sibir is valued at about £3.2bn, which means the company would enter the FTSE 100 at around 80th.

    Moving to main market has already been delayed once. Mr Cameron said Sibir, which runs oilfields in Siberia, a refinery in Moscow and a petrol station chain, had “probably outgrown” Aim. “We were getting a bit of pressure from our advisers that it was time to move up.”

    Yesterday, Sibir posted pre-tax profit to $343.67m (£172.6m) in 2007 from $111.97m the year before. Revenue grew to $1.77bn from $1.05bn.

    Production for the year rose 80pc to 17.8m barrels, with daily output reaching 63,100 barrels of oil per day (bopd) by end-2007, up from 38,900 a year earlier and reflecting increased output from the Salym fields.

    Salym, a 50-50 joint venture between Sibir and Royal Dutch Shell, pumped 30.7m barrels in total in 2007, up from 14.9m. Its output ramped up from 64,000 bopd at the start of the year to 113,000 bopd by year end.

    Mr Cameron said plans are under way to boost Salym’s output to 45m barrels in 2008, with year-end volumes expected to reach between 130,000 and 140,000 bopd. The refinery processed 72.9m barrels in 2007.

    Plans are being drawn up for a $1bn refinery upgrade aimed at lifting the utilisation capacity of the 240,000-bopd facility to 90pc from around 80pc currently. The project is expected to be completed by end-2011, said Mr Cameron.

    He added: “The Moscow region has a combined population of 17m, making it the largest metropolitan area in Europe. Russia is now poised to overtake Germany as the largest automotive market in Europe, a remote possibility only a handful of years ago.”

    The shares rose 68, or 9pc, to 814p.

    http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/01/cnsib101.xml

     

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