News Column

Ex-Yukos boss accuses BP of prioritising Russia over North Sea interests

September 1, 2014

Terry Macalister

Alexander Temerko, a leading oil industrialist in Britain, has accused BP of abandoning its lead role in the North Sea in favour of championing the interests of Russia.

With the EU threatening new sanctions against Russia, the director of Newcastle-based offshore engineering and construction group OGN says the company has lost interest in its home base since taking a 20% interest in Kremlin-controlled Rosneft. "BP used to be a strong voice for the North Sea, but now it is very, very soft. The only time you really hear the voice of BP is when it is warning about sanctions being imposed on Russia," hsaid Temerko.

"BP was a champion of North Sea investment, but it has gradually sold off many of its assets to foreign companies such as Apache and Talisman while putting its money into Russia with Rosneft. You should call it Russian Petroleum, not British Petroleum."

Temerko is a former Russian national and was deputy chairman of Yukos, the now-dismantled Russian oil company established by Mikhail Khodorkovsky, the oligarch and political dissident. Temerko successfully fought off extradition to Russia on what he claimed were trumped up fraud charges and has established himself as a top UK industrialist and Tory donor.

Former shareholders in Yukos recently won $50bn (pounds 30bn) in damages from the Russian government after an international court in The Hague ruled that officials under President Vladimir Putin had deliberately set out to bankrupt and nationalise the business. The assets have largely ended up in the hands of Rosneft, and there have been threats that BP may be sued by former Yukos shareholders.

BP said last night that it had sold off many local assets but it denied it was abandoning the North Sea. "BP and our partners expect to invest more than pounds 7bn in the North Sea over the next five years. We're also still looking for new opportunities. We were awarded interests in 14 new exploration blocks last year - our most successful UK licensing round since the 1990s," said a BP spokesman.

He pointed out that Trevor Garlick, one of its executives, was a co-chair of the Oil & Gas UK lobby group and that BP chief executive Bob Dudley's views on Scottish independence had been widely quoted. In February, Dudley said he did not want to see Scotland "drifting away" from the UK.

Temerko denies he is motivated by anger against BP over Yukos and criticises BP for what he calls its low profile in the campaign against Scottish independence.

The former Yukos executive points out that BP'sUK production has fallen from 330,000 barrels a day 10 years ago to just over 60,000, and its gas output has dwindled from 1.1tn cubic feet per day to 157m. In comparison, BP now obtains from Russia nearly 840,000 barrels of oil a day and 800m cubic feet a day of gas.

Temerko believes BP's new commitment to Moscow, through becoming a 20% shareholder in Rosneft in 2012, is dangerous as it opens it up to reputational and financial risk. He said: "Rosneft is not transparent. We only know from Forbes [magazine] that Igor Sechin, the chairman of Rosneft, earned $50m last year but how much did other directors earn including Bob Dudley, who is now surely a hostage to the Kremlin? I don't believe that former BP chief executives such as Lord Browne would sit on that board."

The BP spokesman said Dudley received no remuneration from Rosneft and believed the investment in Russia would offer shareholders "significant long-term value and opportunities".

Alexander Temerko said BP was putting so much money into Rosneft 'you should call it Russian Petroleum'

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Source: Guardian (UK)

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