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. Last Updated: 07/27/2016

Sibneft Faces Lawsuit Over Oil Field

British-based Sibir Energy said it was planning legal action in a foreign court against Sibneft for pushing Sibir out of a joint venture set up by the companies to develop an oilfield in Siberia.

Sibir claims its stake in Sibneft-Yugra, set up as a 50-50 joint venture in 2000, was reduced to less than 1 percent after Sibneft initiated secret shareholder meetings two years ago at which new shares were approved.

"We've been defrauded of our asset," said Sibir CEO Henry Cameron in an interview Thursday. "We will pursue everybody who has been engaged in the conspiracy against us."

Sibneft denied any wrongdoing, saying it had acted within the framework of an earlier agreement reached between Sibneft-Yugra's shareholders. "Sibir has not acknowledged that this is all part of a broader set of agreements, under which Sibneft has operated faithfully," Sibneft spokesman John Mann said.

Those agreements "governed how we were going to realize several investment projects together," Mann said. He said Sibneft could not provide documents because of separate litigation between Sibir and Sibneft pending in Russian courts.

Cameron said there was no such deal. "It's all nonsense," he said. "We would like them to disclose to us what those agreements are."

The companies formed the joint venture to develop the Priobskoye oil field in Siberia. Sibir held the stake in the joint venture through its Yugraneft subsidiary.

The dilution of the stake torpedoed Moscow Oil and Gas Company's plan to acquire Sibir's share of the joint venture.

Sibir, which owns 31 percent of MOGC, had hoped to increase its share in that company to 45 percent in exchange for the stake. But now it plans to boost its ownership through other means.

The Moscow city government owns the remaining shares in MOGC.

MOGC said Thursday it supported Sibir's bid to recover the stake. But a spokesman would not say whether MOGC would join the suit.

Evgeny Savostyanov, first vice president of MOGC, issued a statement quoting Yuri Luzhkov, mayor of Moscow and MOGC chairman, as saying: "The ... oilfield is our asset. We will use every legal means possible to recover our property."

Sibir's Cameron declined to say whether the suit would name British-based Millhouse Capital, which controls Sibneft, or Millhouse Capital's owner, oligarch Roman Abramovich, who also owns the Chelsea soccer club. Cameron declined to say where or when the suit would be filed.

Sibir's main shareholder is Shalva Chigirinsky, a property and energy mogul who lives in Moscow and owns 43 percent of the company. Chigirinsky is now in the process of increasing his stake to more than 50 percent, Cameron said.

Mann said Sibneft believed that only a Russian court has jurisdiction over the dispute. Cameron said bringing legal action abroad was motivated partly by a lack of faith in Russian courts' ability to issue an objective verdict.