Robert Amsterdam

Vladimir Socor has a piece running today on the next target of the Kremlin: TNK-BP.

On January 21 in Sochi, Russian President Vladimir Putin assured a skeptical Angela Merkel -- visiting in a triple capacity as German Chancellor, holder of the European Union presidency, and incoming G-8 chair -- about Russia’s purported reliability as an energy partner to the West. The relevant actions, however, unfolded not in Sochi, but rather in Siberia and in Algiers, continuing Moscow’s three-pronged offensive against Western energy interests. The three tracks are: forced takeovers of Western investment projects in Russia, aggressive inroads into the West’s traditional supply sources in third countries, and acquisition of infrastructure within the West itself.

The forced-takeover pattern, inaugurated in the case of Yukos and continued in a somewhat different form with Royal Dutch Shell last month, is set to continue at an accelerated rate.

On January 19, Nature Inspectorate Deputy Chief Oleg Mitvol warned the BP-TNK joint venture that it faces environmental and legal investigations possibly as early as March at its giant Kovytka gas project. Russian government agencies had warned BP-TNK already in September that it might face billions of dollars worth of fines or license revocation for alleged environmental violations at Kovytka, even as the project reached the initial production stage. Mitvol’s latest warning, moreover, cites financial inspectors’ claims that the project is lagging behind the 9 billion cubic meters annual production target, thereby also falling short in its purported obligations to Russia’s state budget.

Putin had personally blessed this BP-TNK project in 2003 -- a move that these and other investors in Russia deemed as amounting to a political guarantee. In recent months, however, Gazprom has openly indicated its intention to take over a majority stake in this project with the Kremlin’s help. Mitvol is the same official whom the Kremlin had unleashed against Shell in the final months of 2006, forcing the Shell-led consortium in December to hand over a 50% stake in its Sakhalin-2 project to Gazprom.

Read complete article here.