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BP on alert as Russian jets attack pipeline in Georgia

telegraph.co.uk

BP on alert as Russian jets attack pipeline in Georgia

By Jonathan Sibun

Last Updated: 12:27am BST 11/08/2008

 

 

BP is facing a second front in the former Soviet Union after Russian jets were reported to have launched a bombing raid on its main pipeline in Georgia, raising fears that Moscow was moving to increase its stranglehold on Europe’s energy supplies.

The oil giant is the biggest of more than 100 British companies operating in Georgia that have unwittingly become embroiled in the war between Russia and its neighbour.

The FTSE company is already fighting a protracted battle with four Russia oligarchs for control of TNK-BP. Robert Dudley, the chief executive of the joint venture, was last month forced to go into hiding, while the company’s chief financial officer, James Owen, stepped down last week.

BP, which employs hundreds in Georgia, owns a 30pc stake in the Baku-Tbilisi-Ceyhan pipeline, the world’s second longest. It carries more than 1pc of the global oil supply or 1m barrels a day from Azerbaijan to the Mediterranean and was attacked unsuccessfully by Russian jets on Saturday.

Local reports recorded 51 missile strikes that left craters less than 100 yards on either side of a pressure vent.

A BP spokesman said that, after thorough checks, the company had “disclosed no bombing in the vicinity of the BTC line”.

He said the pipeline was in any case out of action after a fire broke out on the line in Egypt last week. It has still not been put out and oil has been diverted along the Western Route pipeline, he said.

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  • Georgia has been calling for international help and could be keen to heighten fears about any threat to the pipeline, given the potential impact on the West’s oil supplies.

    The spokesman said BP had only “two handfuls of Brits” working in Georgia but that the company would follow embassy advice on whether to keep them in there. The Foreign Office last night warned of “escalating violence” and advised British citizens to leave as soon as possible.

    HSBC is another UK company operating in Georgia. The bank opened its first office in the capital Tbilisi in June with a staff of 44.

    At the time of the opening, Tony Turner, the bank’s chief executive in the country, said the company had plans to open more branches. “With GDP growth in excess of 10pc, strong FDI [Foreign Direct Investment] inflows and a series of highly successful structural reforms in place, we believe Georgia offers some of the best growth opportunities in the CIS region.”

    Analysts warned of the impact of the war on Georgia’s drive to attract foreign investment. Paul Stevens, of think-tank Chatham House, told Sky News: “The conflict is going to cause people to think twice about investing in the oil industry in the Caspian region.”

    Opec nations earned as much in the first half of 2008 as they did in the whole of last year, thanks to record oil prices and production. Members of the Saudi Arabia-led oil exporters’ cartel made $645bn (£335bn) between January and June, just below the record $671bn earned in 2007, according to the US department of energy.

    http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/11/cnbp111.xml

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