BP staff leave Russia as joint venture row grows

Published on Tuesday 22 July 2008 21:14

BP LAST night withdrew its remaining 60 technical specialists from Russia in the latest round of its fight over TNK-BP, its Russian joint venture.

The British oil company said that all 148 BP employees who were seconded to TNK-BP have now been withdrawn.

BP added it was redeploying them to other ventures in regions such as Azerbaijan, the Middle East and the Gulf of Mexico "where their skills are needed and valued".

The Russian billionaires who set up TNK-BP have criticised Robert Dudley, the BP-appointed chief executive of TNK-BP, for his use of staff seconded from BP.

The billionaires have been locked in a battle with BP for several months over control of the joint venture, which is Russia's third-largest oil company.

Lamar McKay, BP's executive vice-president, said: "We are taking this action reluctantly.

"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."

The seconded staff were suspended in March after their efforts to renew their visas ran into problems.

BP said TNK-BP security also prevented them working and they were later benched by an injunction from a Siberian court.

Some of the staff left soon after the visa problems emerged in the spring.

Apart from the seconded staff, TNK-BP itself has had problems with renewing visa and work permits for some of its key managers and former employees of BP, including Dudley.

TNK-BP's chief executive has until Sunday to present a contract to Russia's migration service to renew his visa.

The withdrawal of the seconded staff came as TNK-BP surprised industry commentators by signing its first oil deals with Venezuela.

German Khan, one of TNK-BP's Russian joint owners, yesterday signed the agreements on behalf of the oil company with Hugo Chavez, Venezuela's left-wing president, during a state visit to Russia.

The deals included a study agreement between TNK-BP and PDVSA, Venezuela's state oil company, on potential exploration of the Ayacucho 2 deposit in the Orinoco heavy oil belt.

The Russian billionaires had previously accused BP of limiting TNK-BP's expansion abroad, including in Venezuela. BP had argued the projects were not economically attractive.

Opinion was divided over whether the Venezuelan agreement signalled a chance for reconciliation between BP and its Russian partners.

One source close to TNK-BP said the agreements would not have been possible without clearance from BP.

"I would definitely read it as a first step toward a compromise," the source said.

A second source played it down, saying the deal with Venezuela was unrelated to the dispute between the shareholders and its main aim was to make Chavez's visit a success.