BP's Russian arm in Siberian court blow

BP's Russian arm in Siberian court blow
By Michael Stott and Dmitry Zhdannikov Reuters - Tuesday, May 13 07:06 pm

MOSCOW (Reuters) - BP's Russian venture TNK-BP said on Tuesday court action by a local brokerage had stopped it using key specialist staff, the latest problem to hit the company as a struggle rages over its ownership.

Since the struggle began last year, TNK-BP, which has revenue of $40 billion (20.5 billion pounds), has been raided by Russia's security service, had an employee arrested for alleged espionage, had secondees' visas declared invalid and been hit with a tax claim.

In the latest twist, a TNK-BP spokesman said Tetlis, a small Moscow brokerage, had claimed in a Siberian court that TNK-BP's service agreement governing the use of BP specialists was improper. Tetlis alleged it constituted a special dividend to one shareholder and disadvantaged others, he added.

The Tyumen arbitration court issued an injunction to TNK-BP to halt activities under that agreement and stop making payments. It will hear the Tetlis claim on May 20.

"Both the claim and the injunction we don't believe have any solid legal basis and we will be continuing to pursue our legal options," the TNK-BP spokesman said.

BP and a group of Russian billionaires share 50/50 control of unlisted TNK-BP, which in turn owns 95 percent of listed TNK-BP with a 5 percent free float. Efforts by the state to gain a controlling stake have upset this delicate balance.

As a result of the injunction, all 148 BP secondees -- including well selection and field development experts -- had been barred from working at TNK-BP, Russia's second biggest private oil company, since May 5, the company said.

An initial attempt by TNK-BP to overturn the injunction was rejected by the court, TNK-BP added.

Attempts to reach Tetlis by phone were unsuccessful. A person answering the number advertised on the brokerage's website www.tetlis.ru said its offices had moved.

Tetlis advertises itself as an expert in gaining control of Russian business assets.

LEGAL ASPECTS

"Russian realities are such that an outside investor can face years of hurdles without being able to get access to managing the enterprise", the company says on its site.

"We have spent the past three years at working out the algorithm of solving this problem. We know very well all legal aspects currently in place."

It lists Alexander Tagayev, a former Alfa Bank employee, as its general director. Executive Director Vadim Zykov is a former employee of Alfa Invest management, the site says.

TNK-BP's Russian shareholders include investment vehicle Renova of billionaire Viktor Vekselberg, Lev Blavatnik's Access and Mikhail Fridman and German Khan's Alfa Group. Alfa Bank and Alfa Invest Management are part of Alfa Group.

There was no suggestion that Tetlis was acting with the knowledge of Alfa Bank.

TNK-BP shareholding structure is highly unusual in today's Russian oil industry, where state companies have large stakes in almost all major energy projects.

The recent campaign of harassment against TNK-BP has frustrated managers at the company, who are proud of its record in replacing reserves and using Western technology to boost productivity and manage oilfields more effectively.

The Russian shareholders have issued two statements this year denying plans to sell out but insiders who know them say they are not agreed among themselves about strategy.

"There are co-owners who see their TNK-BP stake as a portfolio investment and would sell at the right price and there are co-owners for whom this is their main business and who do not want to exit," said one person familiar with the matter.

"So you have the oligarchs disagreeing among themselves and disagreeing with BP. It's pretty hard to run the company like that."