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By John Helmer, Moscow

A crack, though not yet a spill, has appeared in the Russian government’s plan to link state-owned oil producer Rosneft with BP in a multi-billion dollar joint venture for oil search in the Kara Sea.

A public statement by the Russian Ministry of Natural Resources, issued Friday, says it is examining the boundaries of the Russian Arctic National Park, established by statute on June 15, 2010, to see if they are crossed by the oil search licences issued to Rosneft last October 11. The three licences are the focus of the Rosneft-BP partnership first unveiled in January. Look carefully at this map, and you can see where the licence boundaries cross into the two forbidden zones 1 and 2:

The financial terms of the joint venture are now being contested in the UK High Court on grounds it violates a pre-existing partnership between BP and the Russian shareholders who control TNK-BP.

For the moment, no works of any kind will be allowed in the Kara Sea licence zones while the Ministry and its licensing authority, Rosnedra, “will clarify the requirements of licensing obligations and opportunities of their performance given the status of protected area, based on the priority of maintaining ecological balance and diversity in the region.”

The World Wildlife Fund (WWF) has told Fairplay today that horizontal drilling and other exploration technologies like seismic surveys by the oil companies are prohibited by Russian law, whatever will be decided by Rosnedra on the boundaries of the national park and special areas. That, said WWF spokesman Aleksey Knizhnikov, is because of the risk that they may trigger subsidence and other geological problems in the protected zones; and because all exploration for oil and other resources is currently banned in the area by the law.

Meantime, Deputy Prime Minister Igor Sechin, who controls Russian resource policy and is chairman of the Rosneft board, issued a warning today that he is against “a subjective approach” that might “delay the implementation of a major project of its cooperation with BP”. Sechin was referring the TNK-BP lawsuit in London. He has yet to address the environmental and licensing issues.

Rosneft has refused to respond to questions on these issues.

Sechin’s interview with the Wall Street Journal, and published in full in Russian by Vedomosti, is aimed at addressing a range of international investor concerns about corporate governance of Rosneft and the likelihood that the TNK-BP oligarchs – Mikhail Fridman, German Khan, Victor Vekselberg, and Len Blavatnik – might derail the project.

Rosneft’s share price has risen 6.3% since the Kara Sea deal was announced. TNK-BP’s share price has traded flat before Sechin’s interview appeared; it is up modestly so far today. BP’s share price has been down 4% since mid-January, and after recovering, it is falling again today.

Sechin was also asked to clarify his view of Oleg Deripaska’s attempt to take over Norilsk Nickel. “The government”, he said, “does not intervene in corporate practices….The shareholders,” Sechin added, “should take the appropriate decisions, most importantly that they [should be] civilized, in the framework of the existing legislation.” Dismissing the speculation that he might favour consolidation of Rusal and Norilsk Nickel into a single national champion, Sechin said “we are watching what is happening there… specific plans we did not get from anybody.”
 

In his interview, Sechin also initiated his own assessment of the case of Bill Browder, the Hermitage Capital fund investor, who has been barred from visa entry to Russia since 2005. For the first time in that case, a senior Russian government official has dissociated himself from the visa ban, expressed personal support for Browder, and suggested the visa bar is based on Russia’s national security statute, not on Browder’s involvement in Russian business controversies involving oligarch and state-run companies. “As for Browder,” Sechin said, “I, frankly speaking, do not know what kind of visa problems he has. I admit that there are some other reasons for the ban on his entry, but certainly it is not the economy. And certainly it is not his economic interests.” Sechin called Browder “a man of genius. He had believed and invested in Russia. And he didn’t miscalculate. The economic efficiency [profitability] of his investments surpasses all imagination.”

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