BP's Russian Venture in Trouble Again

BP's unhappy joint venture in Russia, TNK-BP, was in trouble again today when prosecutors said the company had violated local labor laws.

Moscow's prosecutor's office said it had found "breaches" in the oil venture's employment practices. It conceded the breaches were "insignificant" but said it had asked TNK-BP's embattled chief executive Robert Dudley to fix them.

This latest inquiry follows a complaint from a Kremlin-backed trade union that TNK-BP gives preferential treatment to foreign specialists while discriminating against Russian staff who it alleged receive inferior pay and conditions.

Today's judgment comes at a time of uncertainty over the fate of 150 foreigners at TNK-BP. Visas for foreign staff expire in July and have not yet been renewed. Additionally, 148 international experts seconded to the venture from BP have been locked out of the office since March.

BP is embroiled in a vicious battle for control of TNK-BP with four Russian billionaires. Each side owns 50 per cent of the venture. Most analysts believe the Russian partners — led by the energetic oligarch Mikhail Fridman — are behind the campaign against TNK-BP's international experts.

All of BP's secondees have not worked for nearly three months, after the Russian shareholders barred them from the TNK-BP head office in Stary Arbat, an attractive pedestrianized street in central Moscow and a short walk from the Kremlin.

"It's surreal. I don't have any reference points. I've never been in a situation before where I'm paid not to work," one senior BP secondee told the Guardian today. He said he had been unable to retrieve photos of his children and personal files from the TNK-BP office.

He added: "I still take Russian lessons. I play golf. I go to the gym. I do the school run. I do bath time most nights. For some guys, being paid to do nothing is Valhalla. Others are more philosophical. One friend was in Iran when the Shah was toppled. He says that was much worse.

"Last week was a bit of a trough. But BP has started talking about us working for BP on other assignments. Despite everything, Russia had been a most enriching and interesting experience.'

Today the Presnensky district prosecutor's office in Moscow said TNK-BP was guilty of infringing employment law over holiday allowances and records of employment for its staff. But it had not broken regulations in its recruitment of foreign experts, the office said in a statement posted on its website.

TNK-BP described the development as "positive" and the violations as "technical". The firm categorically rejected accusations it discriminated against Russian employees, saying they made up the vast majority of the 66,000 staff. "There's no discrimination in salaries or remuneration," TNK-BP spokeswoman Marina Dracheva told the Guardian.

BP's Russian partners have repeatedly demanded the resignation of Dudley. They have also complained about the company's alleged poor performance, and said they want TNK-BP to expand internationally, even if this brings it into conflict with BP's existing overseas interests.

It is widely expected Gazprom or another state-run Russian entity will acquire a controlling stake in the company.

So far, however, both sides have said they do not intend to sell. Today, Igor Sechin, Russia's influential deputy prime minister, again claimed the Kremlin did not want to get involved.