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Friday, July 25, 2008

Another one Bites the Dust

So Russia has ejected yet another foreign company from its soil, appropriating its assets and stabbing it in the back. How many more such incidents must occur before greed-blinded Westerners realize that they have no future in Russia? Does Russia need to starting chucking a few CEOs into concentration camps before this happens? If so, hopefully that will soon begin to occur. The Telegraph reports:

BP's battle to stay in oil-rich Russia has been dealt a major blow after the UK company was forced to withdraw its last engineers and technical staff from the country.

After months of pressure the company bowed to the inevitable yesterday and withdrew the remaining 60 staff it had assigned to work at TNK-BP, the joint venture at the centre of a power struggle between BP and three Russian oligarchs.

The withdrawal marks a further slip in BP's grip on Russia's third largest oil producer, which accounts for 25pc of the UK company's annual production and last year made profits of $5bn on sales of $38bn.

Next week, Robert Dudley, chief executive of TNK-BP and a former employee of BP, may be forced to leave Russia in a row over his work permit, putting BP's partners in de facto control of the joint venture.

In all, 148 BP secondees to TNK-BP have been forced to leave following a dispute over the renewal of visas that started in March.

The Moscow immigration office eventually approved the visas, but the employees were barred from TNK-BP's Moscow offices by security guards.

Then, in May, a previously unknown investment company, Tetlis, got an injunction in Tuymen, Siberia, blocking the visas, claiming that the BP staff enjoyed inflated salaries.

The Daily Telegraph tried to contact Tetlis, but a Moscow address listed on court documents housed a chemist shop and a grocers. A second address, registered with the authorities in Moscow, was a children's nursery.

Yesterday, BP said that the Tuymen court case had made little progress and there was no point having valuable employees idle in Russia when they could be redeployed on other business in the Middle East and Gulf of Mexico.

"We are taking this action reluctantly," Lamar Mckay, BP's executive vice-president, said. "These technical experts have played a huge part in making TNK-BP one of Russia's most successful oil companies in the past few years."

Analysts said losing the BP specialists would probably start to impact on TNK-BP's operations by the end of the year. "These people work on projects with long lead times. The impact will start to be felt in a few months."

However, Stan Polovets, chief executive of Alfa-Access-Renova (AAR), the consortium representing the Russian investors, welcomed BP's decision.

He said: "We respect BP's decision and are confident it will not have an adverse impact on TNK-BP's operations. The BP secondees have not been working for TNK-BP for many months now, and the company's operations have not been hampered in any way. In fact, production has been up for the past three quarters, as our colleagues from BP have noted."

In addition to the secondees, about 85 former BP employees, including Mr Dudley, are now directly employed by TNK-BP. All are facing problems with work permits and visas.

AAR claims that BP runs TNK-BP for its own benefit, rather than for all the shareholders, and has been campaigning for the removal of Mr Dudley. BP denies the claim.

AAR argues that he no longer has an employment contract, and therefore must leave Russia when his visa expires next week. BP says the contract is renewed automatically.

1 comment:

Anonymous said...

Excelent news. Finally foreigners understand what Russians feel when they are constantly humiliated by the Embassies and the immigration authorities in western countries. Dudley had no contract but still was given a visa to stay. What else does he need?