Court Bars BP Workers at TNK-BP

APTNK-BP's office Wednesday. A Tyumen court annulled an agreement allowing BP to assign foreign staff to TNK-BP.
A Siberian court on Wednesday ruled that BP employees could not work for joint venture TNK-BP, a day after the British firm announced that it would reassign its remaining foreign specialists from the country.

The Tyumen Regional Arbitration Court decided in favor of Tetlis, a minority shareholder in the company's publicly traded unit, annulling an agreement that had allowed BP to assign foreign support staff to TNK-BP.

The 60 employees had been prevented from working at TNK-BP since March, initially by an injunction from the Tyumen court. After that was lifted, BP says, they were blocked by TNK-BP security personnel from entering the building.

Another 88 BP employees -- mostly engineers and technicians -- left Russia in mid-July after no end to the dispute appeared in sight.

A BP spokesman in Moscow said the company would contest Wednesday's ruling in an arbitration appeals court in Omsk.

"This decision is not binding, because it's not final," the BP spokesman said. "Like anywhere else in the world where the legal system functions, we have the right to appeal.

"We have full confidence in the Russian legal system," the spokesperson added.

TNK-BP has been reeling from an escalating shareholders' conflict over the company's strategy and operations. AAR, the consortium of Russian billionaires who collectively own half of the 50-50 joint venture with BP, have accused Dudley of favoring BP employees and of not sufficiently expanding internationally.

Dudley, who has been struggling to remain in the country, appeared no closer to getting an answer as to what will happen when his transit visa expires Tuesday.

"It's a secret, I won't tell you," Federal Migration Service chief Konstantin Romodanovsky told reporters Wednesday, Interfax reported. "You will see on the 29th."

Tetlis, a Moscow brokerage started by former Alfa Bank employees, had argued that the service agreement that allowed BP specialists to work at TNK-BP was "artificial," providing special dividends to some shareholders while hurting others.

AAR denies any link to Tetlis.

The 148 foreign employees were paid by BP, with an average salary of $685,000, and TNK-BP in turn paid the British company for their services. In the Tyumen suit, Tetlis also demanded that BP return all payments received from TNK-BP for the employees' work, Bloomberg reported.

TNK-BP declined to comment on the ruling.

"As AAR is not involved in the Tetlis litigation, it would be inappropriate for us to comment on the decision," AAR chief executive Stan Polovets said in an e-mailed statement. The company welcomes and needs "foreign managerial and technological talent," he added, but they should be hired directly by TNK-BP.

Polovets said the BP employees were hired "unilaterally" by Dudley and that "from that perspective, we can understand the concerns of minority shareholders."

State officials have said the government will not interfere in the dispute, calling it a standard commercial disagreement.

Valery Nesterov, an energy analyst at Troika Dialog, said the government might intervene, however, if TNK-BP's operations suffer.

"For the government, it's important that they keep on producing oil," Nesterov said. "If the company starts doing badly, the government may step in."

The court's decision, he said, was a mere skirmish. "These are just tactical battles, with gains for one side or the other. The general war for control of the company has not yet begun."