Russian Law Enforcement Raids TNK-BP HQ

Russian officials are downplaying a raid carried out March 14 at TNK-BP headquarters in Moscow. Law enforcement from the Russian Interior Ministry raided the oil company offices to "seize documents related to the Siberian Far-Eastern Oil Company (Sidanko) that belong to the joint venture," reported Interfax.

"We are speaking of seizures, not searches as some media have been reporting, that are being conducted as part of the criminal case of the Sidanko oil company," a Russian Interior Ministry Spokesperson told Interfax.

A source close to the matter told Dow Jones that TNK-BP's headquarters had indeed been searched by Russian law enforcement agencies. The search continued Wednesday afternoon, according to local reports and an unnamed company source.

A TNK-BP spokesperson told reporters, "If necessary, we will fully cooperate with the authorities."

Dow Jones reported that "speculation has been rife that Russian shareholders were likely to sell out this year to state-controlled gas monopoly OAO Gazprom."

Last May, The New York Times reported that the Russian government was moving to secure "a monopoly on exports to Russia" for the state-owned natural gas company Gazprom.

In June, Russia's Gazprom took control of the Kovykta gas field from TNK-BP. Kovykta is a vast natural gas field in proximity to China, the world's second-largest importer of natural gas. Kovykta was TNK-BP's largest natural gas project in Russia.

At the time, analysts suggested that Russia's wrestling away of Kovykta from TNK-BP facilitated "the scope and range to dictate prices and thwart competition."

Despite repeated denials for plans to sell, TNK-BP President Viktor Vekselberg told the daily newspaper Vedomosti Jan. 21, 2008 that he would sell his share of TNK-BP if he were offered $60 billion for the entire company. The amount is considered preposterous by current price standards, stated the Moscow News.

"We did not receive any offers from Gazprom, either vocal or written," Vekselberg told Vedomosti. "We are not having talks. As far as I know, our partners are also not looking at letting TNK-BP go."

TNK-BP, a joint venture established by BP in 2003, is one of the top ten crude oil producers in the world. BP and Access/Renova each own a 50% share in TNK-BP. The company employs 66,000 people throughout Russia and Ukraine.

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