Work-Permit Tour Exemplifies Strange Feud

MTArtamonov, left, shaking hands with Cridland, who is holding Dudley's newly issued work permit, at an office of the Federal Migration Service on Thursday.
A senior TNK-BP employee and the government's top work-permits official walked triumphantly into the sunshine Thursday, after the Federal Migration Service issued eight permits to the firm's senior staff, including CEO Robert Dudley.

Then they did it again for the cameras.

In a bizarre event that exemplifies the chaotic nature of the dispute between TNK-BP's British and Russian shareholders, the Federal Migration Service, keen to distance itself from the conflict, invited a small group of reporters to witness the work-permit issuance.

"The employees can now stay in the Russian Federation and continue their work within the framework of Russian law," said Oleg Artamonov, head of the service's department for foreign work permits.

Usually a formality, the renewal of work permits and visas for TNK-BP's foreign employees has come to symbolize the struggle between BP and AAR, the consortium representing the firm's Russian shareholders, Mikhail Fridman and German Khan's Alfa Bank, Viktor Vekselberg's Renova and Len Blavatnik's Access Industries.

AAR has been pushing for Dudley's ouster, arguing that he has been acting in BP's interests since TNK-BP's founding in 2003. The consortium has called an extraordinary shareholders meeting of TNK-BP Management for Monday to discuss his replacement.

The fact that Dudley and nearly 100 foreign TNK-BP employees were preparing to leave Russia amid fears that the service would fail to renew their work permits sparked an international outcry this week.

The publicity appeared to achieve what months of negotiations could not, and the Federal Migration Service said Wednesday that it would issue permits to six senior TNK-BP staff whose documents were expiring within two weeks. Dudley and 42 other employees whose visas expired toward the end of the month would receive their visas within 10 days, it said, changing course hours later and including Dudley on the urgent list.

"First we approved permits for those top managers whose visas expired July 10. Dudley's expires at the end of August, so he could wait. Then journalists started calling and asking questions about why we weren't granting him an urgent permit, so we decided to add him too," said Yelizaveta Pankratova, the service's deputy spokeswoman.

The country's sprawling bureaucracy has long been the target of criticism from observers and Russian officials alike, who accuse it of inefficiency and corruption.

"The Federal Migration Service are desperately trying to look as though they've done everything right," a source inside TNK-BP said.

Dudley and TNK-BP have also been targeted by the Moscow labor inspectorate, which last week fined them 3,000 rubles ($126) and 40,000 rubles, respectively, over alleged labor infractions.

"It's a huge drain on resources," said the source, commenting on the various bureaucratic hurdles.

Clark Cridland, a TNK-BP vice president who oversees human resources, welcomed the move Thursday but said the fate of dozens of foreign employees remained unclear.

"We have a total of 85 expats in TNK-BP," he said after picking up the eight work permits from Artamonov, the Federal Migration Service official. "We're still worried that the rest will have to leave the country, at least temporarily."

The employees who received the one-year work permits Thursday must now begin the process of getting their visas extended, which can take up to 30 days, Artamonov said. "But I think it will be done quickly," he added.

The service has agreed to issue 71 permits, and the number shrank after several applications were filed incorrectly. Dudley asked to renew a quota of 150, to accommodate extra or replacement hires, but Khan, a shareholder and executive tasked with government relations, sent an earlier request for a lower number.

"There are enough talented and experienced engineers and managers in Russia," AAR CEO Stan Polovets said this week, just eight months after then-President Vladimir Putin warned that firms in the country, especially in the natural resources sectors, had too many foreign managers.

Artamonov denied that the decision to issue work permits to Dudley and senior TNK-BP management came from on high. "No one called us, nothing like that," he said. "Everything was done within the law."

Senior officials, mainly those considered to belong to the Kremlin's liberal faction, have come out against government involvement to settle the dispute, which has cast a pall over the young presidency of Dmitry Medvedev, Prime Minister Putin's protege.

The Kremlin's senior economic aide, Arkady Dvorkovich, told a briefing Thursday that Medvedev and British Prime Minister Gordon Brown might discuss the dispute during a private meeting on the sidelines of next week's Group of Eight summit in Japan.

Yet Dvorkovich said officials would continue to insist that TNK-BP's troubles were a shareholder dispute, in which the government should not meddle.

Meanwhile, in a back room of a Federal Migration Service building in northern Moscow, a dozen people were waiting to sort out their work-permit problems.

One woman, who declined to be identified, said she had visited the site four times in hopes of speaking to someone. "I've been here for about fifteen minutes -- it will take another two hours at least," she said, looking around the nearly empty room.

Cridland, the TNK-BP official, had already left, and Artamonov could be seen opening a bottle of cognac in his office nearby.

n A court in Tyumen on Thursday pushed back to July 23 a hearing into a lawsuit brought against TNK-BP by Tetlis, a minority shareholder in the firm's publicly traded unit, Interfax reported. Tetlis accuses TNK-BP of improperly using 148 BP employees assigned to the firm. On Wednesday, BP said 88 of those employees would leave the country for other BP projects. All 148 are barred from working at TNK-BP by the court injunction.

The court also rejected a request by TNK-BP to transfer the lawsuit to London, Interfax reported.

Staff Writer Anna Smolchenko contributed to this report.