Business, Finance & Economics

Police raid BP offices in Moscow

Armed police officers raided BP's offices in Moscow on Wednesday, one day after rival ExxonMobil took over an Arctic exploration deal that fell through for BP.

Reuters called the raid a sign of "deepening" trouble for BP in Russia:

The raid, a day after ExxonMobil signed a deal giving it access to fields BP had hoped to develop, was ordered to let bailiffs search for documents in a legal battle over BP's failed bid to partner Russia in the Arctic, a spokeswoman said.

The New York Times, on the other hand, reports that white collar office raids are common enough in Russia — they are known as "masky shows" — and that the "timing of the raid... highlighted this peculiar type of Russian risk for another company — ExxonMobil."

Either way, BP denounced the raid.

"It is our opinion that the court order under which ... court bailiffs are now in our office has no legal grounds. The office's work has been paralyzed," BP Russia President Jeremy Huck said, according to Reuters. "We see these actions as pressure on BP's operations in Russia."

Reuters reports that BP had a falling out with Russian authorities this year over a failed Arctic exploration alliance with the state-owned oil firm Rosneft. Minority shareholders in BP's Russian joint venture, TNK-BP, sued over the failed alliance. The shareholders also prevented a parallel $16 billion share-swap deal between BP and Rosneft.

Yevgeny Minchenko, director of Russia's International Institute for Political Expertise, told Reuters that the failure of the Rosneft deal left BP short of allies in Russia, and vulnerable to police raids.

But Nikolai Petrov, an analyst at the Moscow Carnegie Center, had a different take.

"Although there is a coincidence in timings between what is happening with BP and the announcement of the Rosneft-Exxon deal, I wouldn't say the search is a sign that BP will be pressured by the law-enforcement bodies," he said.

The search was related to a lawsuit filed by the TNK-BP shareholders in a Siberian court, the Times reports.

Police carried assault rifles and wore commando-style uniforms when they entered BP's offices on the 17th and 18th floors of a Moscow highrise. BP employees were escorted out, and then the police began going through papers.

“They were just a group of comrades with the badges of special forces, in black outfits, with assault rifles, nothing extraordinary," one BP employee told the Times.