BP drawn into row over Russia's annexation of Crimea

BP has been sucked into the row over Russia's annexation of Crimea with calls for the delisting from the London Stock Exchange of Rosneft, the Moscow-based oil company in which the British group has a 20% holding.

The demand came from Bruce Misamore, the former chief financial officer at Yukos – the oil company that was founded by former oligarch Mikhail Khodorkovsky and later absorbed into Rosneft while Khodorkovsky was in jail.

As Barack Obama announced new sanctions targeting 20 officials and Russia's Bank Rossiya, Misamore said hurting Rosneft would be a good way of punishing Vladimir Putin for his actions in the Ukraine because it remains a largely state-owned energy group.

The former Yukos executive, now retired, also suggested a travel ban on Igor Sechin, the chief executive of Russia's biggest oil producer.

"Why not do something that sends a strong commercial message: delisting Rosneft?" asked Misamore on Thursday by phone from his home in Houston.

The former oilman accepted that the LSE is run by a private company but said the Rosneft shares were only given permission to list in 2006 after a review by the government-sponsored City watchdog of the day, the Financial Services Authority.

"At that time there were not the decisions that there have been since by international arbitration panels which have ruled that some of the assets under the control of Rosneft were appropriated by Rosneft."

Misamore said he witnessed at first hand how Yukos was forced into a sham bankruptcy orchestrated by Sechin and the Russian state with 70% of Rosneft's value being made up of former Yukos assets.

The 2006 flotation of Rosneft in London was only undertaken by the Kremlin as a way of giving credibility to the enlarged business, said Misamore, and would have flopped without BP and Chinese support.

BP took a small stake which was widened to a 20% holding in Rosneft last summer as part of a wider transaction under which the British company sold its half share in TNK-BP to Rosneft.

BP declined to comment on the claims by Misamore. It was not possible to obtain a response from Rosneft but the Moscow-based company has in the past repeatedly denied that it unfairly obtained the Yukos assets, a position that was accepted by the FSA, since replaced by the Financial Conduct Authority.

Sechin warned the west earlier this week that expanding sanctions over Russia's annexation of Ukraine's Crimea region would only make the political situation deteriorate further, according to Reuters.

"Looking into expanding sanctions is something that will only make the conflict worse," Sechin, a longstanding ally of Putin, said during a panel discussion at a forum for investment between Japan and Russia. He added: "It doesn't help solve the problem and is unproductive."

Powered by Guardian.co.ukThis article was written by Terry Macalister, for theguardian.com on Thursday 20th March 2014 17.15 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010


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