Financial Times, by Gideon Rachman, 9 June 2008

A burglar breaks into your house, ties you up and starts loading your possessions into a bag labelled “swag”. From behind your gag, you say: “May I suggest that behaving in this fashion is not in your long-term interests?” That could be true. But the remark still sounds a little weak.

Such bleating, however, tends to be the stock response of western businesses when they run into nastiness in Russia. The current dispute between BP and its Russian partners does not involve overt law-breaking. But BP executives may feel that they are being subjected to a sort of legalised mugging.

Tony Hayward, BP’s chief executive, is struggling to rescue the situation. Last week he issued the standard, futile appeal to Russian self-interest, arguing that the country’s economic future depends on “consistent application of the rule of law”.

BP’s Russian partners may, in fact, have some legitimate grievances about the management of their joint venture. But the sudden pressures being applied to BP have a distinctively Russian flavour. They include raids by the security police, mysterious tax investigations and the denial of visas.

Western businesses involved in disputes in Russia are getting wearily familiar with this sort of thing. Shell was forced to sell part of its stake in a $20bn (€13bn, ¸10bn) energy project in Sakhalin to state-owned Gazprom – after months of pressure and investigations by the Russian environmental regulatory agency. A senior Shell executive likened the experience to eating “a polonium sandwich”.

Russian businesses have also discovered the cost of falling out of favour with the powerful. Most famously, Yukos – a huge energy company – was destroyed after tax investigations. Its former boss, Mikhail Khodorkovsky, is currently in prison in Siberia.
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Dow Jones Newswires, By Adam Mitchell, 10 June 2008

Russian natural gas monopoly OAO Gazprom Deputy Chief Executive Alexander Medvedev said Tuesday the company will look at entering the capital of oil venture OAO TNK-BP once a corporate governance conflict there is resolved.

"We hope the conflict will be solved," Medvedev said in response to a reporter's question at a company press conference here, adding, "Then we'll consider it."

A spat between BP PLC and its Russian partners in oil venture OAO TNK-BP points to mounting pressure from state-owned OAO Gazprom to obtain a stake in the oil producer Russia's third biggest, industry participants say.

TNK-BP is a 50-50 joint venture between BP and a troika of Russian billionaires: Mikhail Fridman, Viktor Vekselberg and Len Blavatnik.

Medvedev also confirmed plans to move towards pricing export contracts in rubles, citing full convertibility of the currency as the key to that happening.

"Then we'll be able to use rubles for our external contracts fully," he said.

In response to another question, Medvedev said Gazprom has received assurance from the Serbian governmnet, after a meeting in St. Petersburg, that an agreement to invest in the country's state-controlled oil and gas company NIS will be ironed out "in the nearest future."