March 21, 2008 / 10:34 AM / 12 years ago

TNK-BP faces ecology checks in crackdown

MOSCOW (Reuters) - Russia’s state ecology watchdog announced on Friday it was launching a probe into the biggest field operated by BP’s Russian venture, days after security services launched a crackdown on the firm.

General view of Russia's Federal Security Service headquarters in central Moscow, March 20, 2008. REUTERS/Alexander Natruskin

Russia’s Federal Security Service (FSB) this week raided the offices of TNK-BP and said it had arrested an employee for espionage. Analysts said the FSB’s actions could be the start of a Kremlin-driven attack on the joint venture.

The environmental inspection will be led by Oleg Mitvol, who two years ago led a campaign against Royal Dutch/Shell on the Pacific island of Sakhalin, effectively forcing the firm to sell out to state gas export monopoly Gazprom.

The natural resource ministry said in a statement the inspection was due to take place in March or April and was a routine check alongside inspections of other firms. But its timing is likely to attract attention.

The Kremlin has been consolidating its presence in the oil sector. There has been market speculation state corporations were eyeing TNK-BP, one of the biggest foreign investments in Russia which in 2006 had profits of $6.6 billion (3.3 billion pounds).

The FSB said it had arrested TNK-BP employee Ilya Zaslavsky and his brother Alexander on suspicion of industrial espionage. Both men are members of the alumni club of the British Council, the British government’s cultural arm.

The Russian foreign ministry said on Friday the arrests had nothing to do with Moscow’s strained relations with Britain.

Ties between London and Moscow hit their lowest point since the Cold War after a row over Russia’s refusal to extradite a former KGB agent wanted for trial in Britain over the murder of a Kremlin critic in London.

KEY ASSETS

That dispute led to diplomats being expelled from both countries and to the forced closure of two regional offices of the British Council.

“This situation is within the jurisdiction of the law enforcement agencies and has no relation whatsoever to the work of the foreign ministry,” said a Foreign Ministry spokesman.

“It is not linked to the current condition of Russian-British relations.”

The FSB, the main successor organisation to the Soviet KGB, is headed by Nikolai Patrushev, a key member of a hardline faction in the Kremlin.

The faction includes Igor Sechin, the Kremlin deputy chief of staff and chairman of state oil firm Rosneft. The firm took over key assets of private oil firm YUKOS after its top executives were charged with fraud and tax evasion.

The resources ministry said on Friday that Mitvol, who is deputy head of its environmental agency RosPrirodNadzor, will check TNK-BP’s SamotlorNeftegaz production unit, which is developing the firm’s biggest Samotlor field.

In 2006, Mitvol threatened to slap Shell with billions of dollars in ecological fines over its projects on Sakhalin. The dispute was resolved when Shell sold control in the $22 billion project to Gazprom.

Reporting by Tanya Mosolova and Tatiana Ustinova; writing by Christian Lowe and Dmitry Zhdannikov; Editing by Charles Dick

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