UPDATE ON GOR INVESTIGATION OF TNK-BP

C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 000816

SIPDIS

SIPDIS

DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR FREDKRIKSEN HEGBURG, EKIMOFF
DOC FOR 4231/IEP/EUR/JBROUGHER

E.O. 12958: DECL: 03/14/2018
TAGS: EPET ENRG ECON PREL RS
SUBJECT: UPDATE ON GOR INVESTIGATION OF TNK-BP

REF: A. MOSCOW 768


B. 07 MOSCOW 3054

C. 07 MOSCOW 508

Classified By: DCM Daniel A. Russell for Reasons 1.4 (b/d)

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SUMMARY
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1. (C) Pressure on TNK-BP appeared to mount with the
announcement that Russia's environmental watchdog was
beginning an investigation of the company, fueling further
speculation that the government was attempting to hasten and
cheapen the transfer of the Russian-owned half of the company
to Gazprom. The ongoing investigation of the Zaslavsky
brothers appears to be focusing on TNK-BP's due diligence
study of Gazprom in anticipation of such a partnership. BP
officials have played down the significance of the raid on
their offices, saying the company has nothing to hide. End
Summary.

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A SECOND LINE OF ATTACK ON TNK-BP?
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2. (SBU) Russia's environmental watchdog announced on March
21 that it was launching an environmental review of TNK-BP's
biggest oil field, Samatlor. The move came on the heels of
an FSB raid of TNK-BP and BP offices in Moscow (ref A) on
March 19 as part of an investigation into "commercial
espionage." The environmental inspection will reportedly be
conducted by Oleg Mitvol, the deputy director and enforcer of
Rosprirodnadzor, the agency in charge of natural resources
protection.


3. (C) Mitvol was also the public face behind the
environmental charges that ultimately led Shell to sell a
majority share of its Sakhalin 2 project to Gazprom (ref C),
and the "license violations" that led to TNK-BP selling to
Gazprom its share of the Kovykta gas field (ref B). His
involvement has further fueled rumors that the FSB raid is
part of a larger plot to hasten the transfer of control of
the Russian half of TNK-BP to a government-owned entity such
as Gazprom at the lowest price possible.

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FSB TO INTERVIEW TWO SENIOR MANAGERS
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4. (C) Meanwhile, TNK-BP VP for International Affairs Shawn
McCormick (Amcit -- strictly protect) told us March 23 that
the FSB has requested that he appear on March 27 for an
interview as a "witness" in relation to the FSB commercial
espionage case. McCormick said he was assured that he is not
a target of the investigation and that he would be allowed to
bring an attorney and interpreter to the interview.
McCormick said his involvement in the investigation stems
form his having initially hired Ilya Zaslavsky into the firm.
However, Zaslavsky only worked for him for six months before
leaving the company last year.


5. (C) McCormick said Zaslavsky returned to the company to
work in TNK-BP's Gas Division, where he worked under the
supervision of two UK citizens, Alistair Ferguson (the
section head) and John Lough, on what was called the "Gazprom
project." (N.B. We believe Alexander Zaslavsky may also have
been working on the project as a consultant.) As McCormick
described it, this project was "due diligence" on TNK-BP's
part to prepare for the widely expected buy-out by Gazprom of
the current Russian shareholders. He did note that this
project did involve a lot of digging into Gazprom's
activities and organization. McCormick said Ferguson has not
yet been contacted by the FSB but has already retained
counsel in anticipation of a summons.

--
BP
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6. (C) BP contacts with whom we spoke generally played down
the significance of the raid of BP offices, saying BP has

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"nothing to hide." They also stressed that BP and TNK-BP are
separate entities.
BURNS