BP recalls staff from Russia

BP recalls staff from Russia

By Catherine Belton in Moscow and Ed Crooks in London

Published: March 26 2008 02:00 | Last updated: March 26 2008 02:00

BP has recalled 148 foreign employees on secondment to the oil group's Russian joint venture TNK-BP because of visa problems as pressure on the UK's biggest investment in Russia intensifies.

The technical staff, mostly British and Americans, have been told to stay away from work until confusion about Russia's new visa arrangements for foreign workers has been resolved. Most are still in the country.

TNK-BP said they were being recalled as a precaution: "There is some cloudiness and greyness about the status of their visas" after changes to migration laws late last year, it said.

The news came as the Russian interior ministry told Reuters it had opened a criminal case into large-scale tax evasion by Sidanco, an oil unit that once formed the company but was dissolved for about $42m. The interior ministry spokesperson could not be reached.

Tension over TNK-BP, 50 per cent owned by BP and 50 per cent by three Russian tycoons, has escalated in recent days.

Police last week raided the Moscow offices of BP and TNK-BP, and the Russian security services said they had charged an employee of TNK-BP and his brother with industrial espionage.

Russia's environmental watchdog, led by Oleg Mitvol, its aggressive deputy chief, also intends this week to begin a "routine probe" into TNK-BP's biggest oil field, along with other companies' fields.

TNK-BP had been investigated by the security services, suffered visa problems and faced an environmental agency probe, according to one industry executive. "Chaos or conspiracy: you decide," he said.

Some analysts say TNK-BP is identified for takeover by Gazprom, the state-controlled gas company. Gazprom has said it hoped to complete a deal to take over TNK-BP's biggest gas project, the Kovytka gas field in east Siberia, by the end of April. TNK-BP was forced to sell its 62.9 per cent stake in the field to Gazprom last year but the deal has been repeatedly delayed.

There is speculation that Gazprom seeks to buy out the Russian half of TNK-BP, too. TNK-BP's Russian shareholders have denied they want to sell.

BP's stake in TNK-BP is important, at 22 per cent of last year's production and 19 per cent of its oil and gas reserves.

Russia's president-elect, Dmitry Medvedev, in an interview with the Financial Times, denied the espionage case was tied to politics.

BP's decision to recall technical staff does not affect the more than 40 senior managers employed full-time by TNK-BP.