RUSSIA: BP's Head of Operations in Russia Jeremy Huck says their concern is business not politics

Record ID: 643961

  • Title: RUSSIA: BP's Head of Operations in Russia Jeremy Huck says their concern is business not politics
  • Date: 19th January 2011
  • Summary: MOSCOW, RUSSIA (JANUARY 17, 2011) (REUTERS) VARIOUS KREMLIN EXTERIOR MOSCOW, RUSSIA (JANUARY 18, 2011) (REUTERS) BP HEAD OF OPERATIONS JEREMY HUCK AND ROSNEFT VICE-PRESIDENT PETER O'BRIEN AT EKHO MOSKVY INTERVIEW CAMERAMAN FILMING INTERVIEW INTERVIEW IN PROGRESS JOURNALIST CONDUCTING INTERVIEW SCREEN WITH EKHO MOSKVY RADIO LOGO (SOUNDBITE) (Russian) BP HEAD OF OPERATIONS IN RUSSIA, JEREMY HUCK, SAYING: "[These questions about Yukos] are political, and not business-related. And we're trying to do a business transaction." CAMERAMAN FILMING INTERVIEW (SOUNDBITE) (Russian) BP HEAD OF OPERATIONS IN RUSSIA, JEREMY HUCK, SAYING: "We think that the shares that we're receiving from Rosneft in the share exchange, and the projects that we're planning to do with Rosneft, and which we've done - they're sanctioned by the Russian government, and there is support for our project. The question about where those assets are from, that's a question better asked of Rosneft or of the government." MOSCOW, RUSSIA (JANUARY 18, 2011) (REUTERS) VARIOUS ROSNEFT OFFICE BUILDING EXTERIOR SIGN READING 'ROSNEFT OIL COMPANY' TNK-BP OFFICE EXTERIOR SIGN READING 'TNK-BP' VARIOUS SIGN SHOWING ROSNEFT TRADING VALUE
  • Embargoed: 3rd February 2011 12:00
  • Keywords:
  • Location: Russian Federation
  • Country: Russia
  • Topics: Industry,Energy
  • Reuters ID: LVA5C9GYBZXAX5WAYID9Z550Y0U
  • Story Text: BP's head of operations in Russia, Jeremy Huck said In an interview with Russian radio station, Ekho Moskvy on Tuesday (January 18) that any questions concerning Yukos were politically-related, not business-related, and that BP was in Russia to conduct business.
    BP agreed on Friday (January 14) to form a joint venture with state-controlled Rosneft to develop three of Rosneft's offshore exploration blocks in northern Russia, which the companies said could hold as much oil and gas as the UK North Sea, implying a 60 billion barrel prize.
    Russia's energy riches make it a tantalising destination for foreign companies despite daunting corruption and doubts about the rule of law -- deepened when a court added six years to jailed ex-tycoon Khodorkovsky's prison term on Dec 30, 2010.
    The BP deal is coloured by Khodorkovsky's case because Rosneft became Russia's largest oil company by snapping up former Yukos assets after Khodorkovsky's firm was bankrupted by tax claims following his gunpoint arrest in 2003.
    Khodorkovsky has accused Putin's energy tsar Igor Sechin, now a deputy prime minister and the Rosneft board chairman, of engineering his prosecution and the dismantling of Yukos, once Russia's largest oil producer.
    In Friday's interview, however, BP's head of operations in Russia, Jeremy Huck, said that although questions about Yukos assets were interesting, he saw them as political and unrelated to the current transaction with Rosneft.
    "[These questions about Yukos] are political, and not business-related. And we're trying to do a business transaction," Huck said.
    Friday's announcement of BP and Rosneft's joint venture included information about plans for BP to swap 5 percent of its own shares, valued at around $7.8 billion, for a 9.5 percent stake in Rosneft, giving the British oil major a total 10.8 percent stake.
    Huck said that BP was conducting business with Rosneft as a fellow oil company, and was not raising political issues. He suggested that questions about former Yukos assets now owned by Rosneft were best directed to the Russian government or Rosneft itself.
    "We think that the shares that we're receiving from Rosneft in the share exchange, and the projects that we're planning to do with Rosneft, and which we've done - they're sanctioned by the Russian government, and there is support for our project. The question about where those assets are from, that's a question better asked of Rosneft or of the government," Huck said.
    On Dec 30 Khodorkovsky, the long-jailed former Yukos oil company chief widely seen in the West as a victim of Putin's Kremlin, was sentenced to stay in prison until late 2017 after a politically charged theft and money-laundering trial.
    Sharply criticising the trial, Western governments warned that Russia would not curb its energy dependence if it failed to implement the rule of law and push through reforms needed to modernise the economy.
    Yet in spite of Mevedev's talk for the need to diversify the economy away from oil and gas, the BP deal suggests Moscow will continue to wield its oil wealth as a tool to lure foreign investment and strengthen its clout worldwide.
    Any attempt to condition security or commercial ties on compliance with human rights demands is a "road to nowhere", Foreign Minister Sergei Lavrov said at an annual news conference last week meant to set the tone for 2011.
    A spokesman for British Prime Minister David Cameron set the BP-Rosneft agreement apart from long-strained diplomatic relations on Monday, saying it was "a commercial deal between two companies" with no British government political involvement.
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