BP has been accused by a top oil industrialist of turning away from its leading North Sea role. OGN director Alexander Temerko says that the oil giant has spurned its domestic market since acquiring a 20pc ownership stake in Russian Rosneft, even as the EU threatens fresh sanctions against Russia.
Temerko said that the company used to be a leading voice for UK North Sea concerns. He accused BP of once championing local investment but then selling off a large proportion of its assets over time, often to overseas companies such as Talisman and Apache. At the same time, it invested capital into the Russian market via Rosneft, which is controlled by the Kremlin.
Mr Temerko was formerly a Russian national as well as being the deputy chairman of a now defunct oil company in Russia, Yukos, which was set up by political dissident and oligarch Mikhail Khodorkovsky.
Temerko faced a prolonged extradition battle on the basis of fraud charges, which he successfully fought. He has since found success in the UK as a leading industrialist and strong Tory party supporter and donor. In fact, former Yukos shareholders were recently awarded over thirty billion British pounds (equivalent) in damages from Russia’s government. The Hague International Court found that the regime under Putin purposely operated to nationalise the company after forcing it into bankruptcy.
These assets primarily diverted to Rosneft, and now BP risks being sued by the successful former shareholders of Yukos as part of the same case.
BP did admit that it had had a programme of asset sales within the UK North Sea but denied plans to move away from it entirely, saying instead that it was one of their four strategic worldwide locations identified as a focal point for spending. As well as plans to invest ?7bn within five years, the company has stated that it is actively seeking fresh opportunities in the UK North Sea after being awarded the interests of fourteen additional exploration blocks in 2013. A BP spokesperson said that the acquisition was the most successful round of licensing that the company had taken part in the UK since the nineties.
The same spokesperson also highlighted the fact that BP’s CEO, Bob Dudley, had spoken strongly and publicly about his preference to see Scotland and England united and that one of the company’s executives, Trevor Garlick, sits on the board of the Oil and Gas lobby group for the UK.
However, Mr Temerko has denied allegations that his criticisms are driven by anger over the Yukos scandal, saying that BP has also been guilty of keeping a low profile in supporting the ‘no’ campaign ahead of the independence referendum.
He pointed out that BP’s UK oil production levels had dropped to just 60,000 barrels from 330,000 daily just ten years ago. At the same time, the company is only extracting 157 million cubic feet of gas a day, compared to 1.1 trillion cubic feet ten years previously.
Temerko believes that BP’s investment in Rosneft is particularly dangerous in terms of financial and reputational risk due to the Russian state-owned company’s lack of transparency.
BP said that they believed the Russian investment would offer their shareholders ‘significant’ opportunities and value in the long term.Last updated on 11:57AM - 03/10/14