Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Sibir Sues Millhouse Over Fields

sibirenergy.comSalym field, a deposit jointly operated by Sibir. The firm wants billions of dollars in damages from Roman Abramovich.
An affiliate of Sibir Energy is seeking billions of dollars in damages in a London lawsuit against billionaire Roman Abramovich and his company Millhouse Capital, arguing that it was cheated out of its Russian assets.

The lawsuit, filed last week on behalf of Yugraneft, says Abramovich's company Sibneft illegally diluted Yugraneft's interest in their joint company that had fields in Russia from 50 percent to 1 percent, Sibir said in a statement.

"The proceedings ... involve substantial claims to recover the proceeds of the diluted interest," Sibir, a company co-owned by billionaire Shalva Chigirinsky, said Friday.

Sibir didn't say how much it was seeking in damages, but an oil analyst at investment bank KIT Finance, Konstantin Cherepanov, estimated Yugraneft's reserves of 290 million tons of oil that it contributed to the joint venture to be worth at least $6 billion. Abramovich has an estimated fortune of more than $20 billion.

The Commercial Court in London received the lawsuit from the provisional liquidator of Yugraneft, Stephen Cork, who was appointed last week by the High Court in London, the statement said. The liquidator of the company in Russia, where it was also declared bankrupt, supported the legal action, the statement said.

Cork also filed a lawsuit against self-exiled tycoon Boris Berezovsky, who is pursuing a separate case against Abramovich for his share of proceeds from the sale of Sibneft to Gazprom in 2005. Berezovsky says he had an interest in Sibneft.

Sibir co-owner Shalva Chigirinsky
Kate Harrison, a London-based spokeswoman for Cork, declined further comment. But Khristofor Ivanyan, a Sibir Energy legal representative in Russia, said in comments to the media published Monday that any payment from Sibneft to Berezovsky would mean that he owed some of that money to Yugraneft.

John Mann, a spokesman for Abramovich and Millhouse, said he didn't see the case as a threat. "This case has already been reviewed by courts in Russia and the British Virgin Islands and in every case the courts have ruled that Sibneft operated lawfully," he said.

Chigirinsky has been waging a legal battle with Abramovich over the joint venture since 2004 when he found out that his assets had been diluted in 2002. He decided to bankrupt Yugraneft as part of the effort. The businessmen joined forces in 2000.