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BP withdraws remaining TNK-BP specialists

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BP withdraws remaining TNK-BP specialists

By Catherine Belton in Moscow

Published: July 22 2008 19:36 | Last updated: July 22 2008 19:51

BP is withdrawing all its remaining technical specialists from TNK-BP, its Russian joint venture as the UK-based oil group becomes increasingly frustrated with its local partners.

The pull-out of the 60 specialists is likely to hit TNK-BP’s future production when the Russian government has urged Russia’s oil industry to increase output in response to the first signs of a decline in a decade.

Alastair Graham, BP’s chief shareholder representative in TNK-BP, said “We’re taking these actions reluctantly. These technical experts have played a huge part in making TNK-BP one of the most successful oil producers and [their departure] will have an impact on the company’s performance.”

The move also came as TNK-BP signed off on a deal to study a project to extract heavy oil from Venezuela’s Orinoco Oil Belt, an agreement that could partly dispel the Russian shareholders’ claims that BP is blocking the joint venture’s international expansion.

Mr Graham said the 60 specialists that had remained in Russia had been due to install new technology that would have helped the company tap new remote fields and boost production in west Siberia by halving drilling costs with new hydro-rigs.

They would now be redeployed at other BP ventures across the globe, such as in Azerbaijan, the Middle East and the Gulf of Mexico where they could “add more value” for BP shareholders.

BP’s technical specialists have been barred from working at the company since March, because of, first, visa problems and then, a court injunction, part of a battle for control of the company.

BP’s decision comes as officials threaten to deny Robert Dudley, the BP-backed chief executive, a new visa. His forced departure would be a serious blow to BP’s holding in TNK-BP and would leave the Russian shareholders with operational control.

The Russian government has insisted the stand-off is a matter for shareholders and has said it will not interfere.

Dmitry Peskov, spokesman for Vladimir Putin, the Russian prime minister, reiterated that view on Tuesday but added “we can only hope that such decisions by BP do not negatively impact the activity of the company”.

The Russian shareholders, who hold their stake in the venture via the Alfa-Access-Renova consortium, said they were confident BP’s decision “will not have an adverse impact on TNK-BP’s operations”, adding that the specialists had not been working at the company for months.

BP had already temporarily redeployed some 88 specialists seconded to TNK-BP because of the injunction. An Omsk court last week had ruled to overturn an injunction against the specialists returning to work, but Mr Graham said the injunction had yet to be lifted by bailiffs.

BP has accused AAR of using corporate raiding tactics to seize control of the venture. AAR denies any connection to the mounting administrative pressure but has said it wants to reduce the number of foreign staff at the company and get rid of the costly BP technical staff.


Lex: TNK-BP – Jul-15

Copyright The Financial Times Limited 2008

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