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Oil: BP edged further out of Russia after visas are refused logo

Oil: BP edged further out of Russia after visas are refused

· Oil firm calls latest move in bitter row ‘disgraceful’ 
· Oligarchs poised to seize control of joint venture

The future of BP in Russia was in doubt last night after its joint oil venture TNK-BP confirmed that its chief executive, Bob Dudley, and all international staff would have to leave Russia this month.

The decision by Moscow officials not to renew Dudley’s visa follows a bitter battle between BP and its Russian partners that could see a group of oligarchs led by Mikhail Fridman and Viktor Vekselberg seize operational control of TNK-BP.

Gordon Brown is expected to raise the issue in wider talks on energy security when he meets the new Russian president, Dmitry Medvedev, at the G8 summit in Japan next week. Brown’s predecessor had a row with Vladimir Putin at the last G8 summit and Anglo-Russian relations have been deteriorating since then.

With BP struggling to rebuild a reputation hit by problems in the US and TNK-BP making up a quarter of its stagnating output, the British firm can ill afford to lose its influence and possible ownership of such vital assets. “We can’t say the Russian half has won but they are close to winning,” said Konstantin Cherepanov, an analyst with the Moscow brokerage KIT Finance.

The Russian shareholders denied having anything to do with BP’s visa woes but most Kremlin-watchers are in no doubt that BP’s Russian partners have used state resources to put pressure on BP.

BP described the visa ruling as “utterly disgraceful”. A company spokesman in London said: “We are very disappointed to see that many of the expatriate staff working in TNK-BP will have to leave Russia and may not be able to return. The loss of these staff will definitely damage TNK-BP, its performance and, by extension, the performance of the Russian oil sector.

“We are both surprised and disappointed that TNK-BP management’s properly authorised request has been denied and that a process which the company has gone through without problems in previous years has been interfered with by two shareholders in the company’s management, acting without authority in disregard of agreed and established internal processes,” he said.

Dudley’s departure will raise further questions about the rule of law in Russia and the climate for international investors. It will also throw doubt on the reformist credentials of Russia’s new president.

On Friday, Medvedev assured the EU’s trade commissioner, Peter Mandelson, that the Kremlin would not get involved in the dispute, which has escalated in recent months. He told Mandelson that the state was neutral and would “keep away”.

In reality, BP has suffered unprecedented harassment from the Russian state, including the FSB – Russia’s spy agency – which raided TNK-BP’s and BP’s Moscow offices in March, as well as the interior ministry and Moscow city hall.

Nine other TNK-BP executives are likely to leave with Dudley as early as next week. They include James Owen, chief financial officer, and two vice-presidents, Kris Sliger and Richard Herbert.

It is not yet clear whether Dudley’s exile is permanent or temporary. Dudley had asked for permits for 146 foreign specialists to be renewed. German Khan, TNK-BP’s executive director, asked for 63.

On Monday Moscow city hall approved the lower figure. In theory, Dudley could return with others once their visas are ready. In reality, the Russian partners are likely to arrange his indefinite exclusion.

The Russian shareholders have repeatedly demanded Dudley’s resignation. Dudley said: “We have been given no grounds to believe these issues will be resolved before senior international staff and their families will have to leave Russia.”

With TNK-BP in effect decapitated, BP might have to pull out of Russia and sell its stake to Gazprom, Cherepanov said. “This is the worst-case scenario. But it’s more likely they [BP] will revise the rules on how the company is managed.’

The Russians shareholders accuse Dudley of running TNK-BP like a BP subsidiary. They also want the firm to expand abroad even if this brings it into conflict with BP. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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