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) -------------- SUMMARY -------------- ¶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. -------------- A SECOND LINE OF ATTACK ON TNK-BP? -------------- ¶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. -------------- FSB TO INTERVIEW TWO SENIOR MANAGERS -------------- ¶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 -- ¶6. (C) BP contacts with whom we spoke generally played down the significance of the raid of BP offices, saying BP has MOSCOW 00000816 002 OF 002 "nothing to hide." They also stressed that BP and TNK-BP are separate entities. BURNS