Office raid deals new blow to BP in Russia

By @ibtimes on

Bailiffs raided BP's Moscow offices Wednesday, causing new problems for the British oil company a day after ExxonMobil signed a deal that ended BP's hopes of developing Arctic offshore oil fields with Russia.

The morning raid, in which about 15 black-clad special force officers entered the central Moscow headquarters of BP Trading and sealed it off, was part of a legal battle being waged over BP's failed attempt to partner Russia in the Arctic.

A spokeswoman for the bailiffs said they were looking for documents for use in a case in which minority shareholders in TNK-BP, BP's Russian joint venture, have sued BP over its failed Arctic alliance with state-owned Rosneft.

We were ordered to leave the office and work from home, a BP source said, adding that only senior company officials and lawyers remained in the building with the bailiffs.

BP said it was cooperating with the Russian authorities.

The raid highlighted BP's problems in Russia since it fell out with the authorities this year over a deal with Rosneft that would have allowed it to explore the same fields that U.S. rival ExxonMobil will now have the chance to develop.

Yevgeny Minchenko, director of Russia's International Institute for Political Expertise, said BP was now vulnerable and short of allies in Russia.

I don't think that it was the Kremlin or the government that sent the order to the bailiffs (to carry out the raid). It's just that the people who carry out the decision understand that the authorities won't stand up for BP, he said.

But political analyst Nikolai Petrov of the Moscow Carnegie Center said the raid did not mean BP would now face frequent harassment from the police or legal authorities.

Although there is a coincidence in timings between what is happening with BP and the announcement of the Rosneft-Exxon deal, I wouldn't say the search is a sign that BP will be pressured by the law-enforcement bodies, he said.

ARCTIC DREAMS IN TATTERS

Tuesday's pact gives Exxon access to potentially substantial reserves in Russia, the world's top oil producer.

Rosneft gained by being able to bring in one of the few companies capable of drilling in the harsh, deep waters of the Arctic.

The deal was a big blow for BP, ending its chances of salvaging its own agreement with Rosneft. That agreement collapsed shortly after it was announced in January following objections from TNK-BP shareholders who also prevented a parallel $16 billion share swap deal between BP and Rosneft going ahead.

Alfa-Access-Renova (AAR), the consortium that represents the shareholders, objected to the BP-Rosneft pact, saying that BP was obliged to pursue all its Russian ventures through TNK-BP.

They say they suffered big losses when the venture collapsed.

Tuesday's raid was not the first time BP has been subjected to such treatment in Russia.

Security forces searched BP's headquarters in Moscow in 2008 during a corporate standoff at TNK-BP which resulted in TNK-BP boss Bob Dudley, who is now CEO of BP, being forced out of Russia.

(Additional reporting by Dmitry Zhdannikov, Maria Tsvetkova and Gleb Gorodyankin; Writing by Timothy Heritage; Editing by Greg Mahlich and Will Waterman)

Join the Discussion