

Currently released so far... 12478 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy Niamey
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sapporo
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
AU
ASEC
AE
AF
AORC
AEMR
AMGT
ABUD
AFFAIRS
APER
AS
AMED
AY
AG
AR
AJ
AL
AID
AM
AODE
ABLD
AMG
AFIN
ATRN
AGAO
AFU
AN
AA
ALOW
APECO
ADM
ARF
ASEAN
APEC
AMBASSADOR
AO
ASUP
AZ
AADP
ACOA
ANET
AMCHAMS
ACABQ
ASECKFRDCVISKIRFPHUMSMIGEG
APCS
AGMT
AINF
AIT
AORL
ACS
AFSI
AFSN
ACBAQ
AFGHANISTAN
ADANA
ADPM
AX
ADCO
AECL
AMEX
ACAO
ASCH
AORG
AGR
AROC
ASIG
AND
ARM
AQ
ATFN
AC
AUC
ASEX
AER
AVERY
AGRICULTURE
BL
BR
BO
BA
BD
BM
BK
BG
BU
BB
BH
BTIO
BY
BEXP
BP
BE
BRUSSELS
BF
BIDEN
BT
BX
BC
BILAT
BN
BBSR
BTIU
BWC
BMGT
CA
CASC
CVIS
CM
CH
CO
CU
CD
CWC
CI
CS
CY
CMGT
CF
CG
CR
CB
CV
CW
CE
CBW
CT
CPAS
COUNTERTERRORISM
CJAN
CODEL
CIDA
CDG
CDC
CIA
CTR
CNARC
CSW
CN
CONS
CLINTON
COE
CROS
CARICOM
CONDOLEEZZA
COUNTER
CL
COM
CICTE
CIS
CFED
COUNTRY
CJUS
CBSA
CEUDA
CLMT
CAC
COPUOS
CIC
CBE
CHR
CTM
CVR
CITEL
CLEARANCE
CACS
CAN
CITT
CARSON
CACM
CDB
CAPC
CKGR
CBC
EC
EG
EPET
ECON
ETRD
EFIN
EIND
EMIN
ENRG
EAID
EAGR
EUN
ETTC
EAIR
ENIV
ES
EU
EINV
ELAB
ECIN
EFIS
ELTN
EWWT
ECPS
ECONOMIC
ENGR
EN
EINT
EPA
ELN
ESA
EZ
ER
ET
EFTA
EINVECONSENVCSJA
EUMEM
ETRA
EXTERNAL
EI
EUR
EK
ERNG
ENGY
ETRDEINVECINPGOVCS
ENERG
EINVEFIN
ENVR
ECA
ELECTIONS
ETC
EUREM
ENNP
EFINECONCS
EURN
ECINECONCS
EEPET
EXIM
ERD
ENVI
ETRC
ETRDEINVTINTCS
ETRO
EDU
ETRN
EAIG
ECONCS
ECONOMICS
EAP
ECONOMY
EINN
EIAR
EXBS
ECUN
EINDETRD
EREL
EUC
ESENV
ECONEFIN
ECIP
EFIM
EAIDS
ETRDECONWTOCS
EUNCH
EINVETC
IZ
IT
IR
IS
IN
IC
IAEA
IO
ICAO
IWC
ID
IV
ISRAEL
IAHRC
IQ
ICTR
IMF
IRS
IDP
IGAD
ICRC
ICTY
IMO
IL
INRA
INRO
ICJ
ITU
IBRD
INMARSAT
IIP
ITALY
IEFIN
IACI
ILO
INTELSAT
ILC
ITRA
IDA
INRB
IRC
INTERPOL
IA
IPR
IRAQI
ISRAELI
INTERNAL
ISLAMISTS
INDO
ITPHUM
ITPGOV
ITALIAN
IBET
INR
IEA
IZPREL
IRAJ
ITF
IF
KDEM
KU
KPAL
KNNP
KCRM
KZ
KN
KS
KJUS
KTFN
KSCA
KV
KISL
KPAO
KPKO
KIRF
KTIA
KIPR
KFLO
KFRD
KTIP
KAWC
KSUM
KCOM
KAID
KE
KTDB
KMDR
KOMC
KWBG
KDRG
KVPR
KTEX
KGIC
KWMN
KSCI
KCOR
KACT
KDDG
KHLS
KSAF
KFLU
KSEO
KMRS
KSPR
KOLY
KSEP
KVIR
KGHG
KIRC
KUNR
KIFR
KCIP
KMCA
KMPI
KBCT
KHSA
KICC
KIDE
KCRS
KMFO
KRVC
KRGY
KR
KAWK
KG
KFIN
KHIV
KBIO
KOCI
KBTR
KNEI
KPOA
KCFE
KPLS
KSTC
KHDP
KPRP
KCRCM
KLIG
KCFC
KTER
KREC
KTBT
KPRV
KSTH
KRIM
KRAD
KWAC
KWMM
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KOMS
KX
KMIG
KRCM
KVRP
KBTS
KPAONZ
KNUC
KNAR
KPWR
KNPP
KDEMAF
KNUP
KNNPMNUC
KERG
KGIT
KPAI
KTLA
KFSC
KCSY
KSAC
KTRD
KID
KOM
KMOC
KJUST
KGCC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFTFN
KO
KNSD
KHUM
KSEC
KCMR
KCHG
KICA
KPIN
KESS
KDEV
KCGC
KWWMN
KPAK
KWNM
KWMNCS
KRFD
MOPS
MCAP
MPOS
MARR
MO
MNUC
MX
MASS
MG
MY
MU
ML
MR
MILITARY
MTCRE
MT
MEPP
MA
MDC
MP
MAR
MASSMNUC
MARAD
MAPP
MZ
MD
MI
MEETINGS
MK
MCC
MEPN
MRCRE
MAS
MIL
MASC
MC
MV
MTCR
MIK
MUCN
MEDIA
MERCOSUR
MW
MOPPS
MTS
MLS
MILI
MTRE
MEPI
MQADHAFI
MAPS
NO
NATO
NL
NP
NZ
NSF
NI
NH
NG
NAFTA
NU
NASA
NR
NATOPREL
NSSP
NSG
NA
NT
NW
NK
NPT
NPA
NATIONAL
NPG
NSFO
NS
NSC
NE
NGO
NDP
NIPP
NRR
NEW
NZUS
NC
NAR
NV
NORAD
OTRA
OPCW
OVIP
OAS
OREP
OPIC
OIIP
OPRC
ODIP
OEXC
OPDC
OSCE
OIC
OSCI
OECD
OFDP
OFDA
OMIG
OPAD
OFFICIALS
OVP
OIE
OHUM
OCS
OBSP
OTR
OSAC
ON
OCII
OES
PGOV
PREL
PHUM
PTER
PINS
PINR
PREF
PK
PROP
PA
PARM
PBTS
PMAR
PM
PGIV
PE
PRAM
PHUH
PHSA
PL
PNAT
PO
PLN
PAO
PSA
PHUMPGOV
PF
PEL
PBIO
POLITICS
PHUMBA
PAS
POL
PREO
PAHO
PMIL
POGOV
POV
PAK
PNR
PRL
PG
PREFA
PSI
PINL
PU
PARMS
PRGOV
PALESTINIAN
PAIGH
POLITICAL
PARTIES
POSTS
PROG
PORG
PTBS
PUNE
POLICY
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PP
PS
PY
PTERE
PGOF
PKFK
PSOE
PEPR
PPA
PINT
PRELP
PSEPC
PGOVE
PINF
PNG
PGOC
PFOR
PCUL
POLINT
PGGV
PHALANAGE
PARTY
PGOVLO
PHUS
PDEM
PECON
PROV
PHUMPREL
RS
RU
RELATIONS
RW
RO
RM
RP
ROOD
RICE
RUPREL
RSO
RCMP
REACTION
REPORT
REGION
RIGHTS
RF
RFE
RSP
RIGHTSPOLMIL
ROBERT
SU
SCUL
SNAR
SOCI
SF
SA
SHUM
SENV
SP
SR
SY
SANC
SC
SMIG
SZ
SARS
SW
SEVN
SO
SEN
SL
SNARCS
SNARN
SI
SG
SN
SH
SYR
SAARC
SPCE
SHI
SCRS
SENVKGHG
SYRIA
SWE
STEINBERG
SIPRS
ST
SNARIZ
SSA
SK
SPCVIS
SOFA
SIPDIS
SAN
TC
TI
TBIO
TH
TSPL
TRGY
TSPA
TPHY
TU
TW
TS
TAGS
TK
TX
TNGD
TZ
TF
TL
TV
TN
TD
TIP
TR
TP
TO
TT
TFIN
THPY
TERRORISM
TINT
TRSY
TURKEY
TBID
US
UK
UNGA
UP
UZ
UNMIK
USTR
UNO
UNSC
UN
UNESCO
UNAUS
UNHRC
UY
UG
UNHCR
UNCND
USOAS
USEU
UNICEF
UNEP
UV
UNPUOS
UNCSD
USUN
UNCHR
UNDC
USNC
UE
UNDP
UNC
USPS
USAID
UNVIE
UAE
UNFICYP
UNODC
UNCHS
UNIDROIT
UNDESCO
UNCHC
Browse by classification
Community resources
courage is contagious
Viewing cable 08MOSCOW864, WHAT'S BEHIND THE RAIDS ON TNK-BP AND BP REF: A. MOSCOW 816 B. MOSCOW 768 C. 07 MOSCOW 3054 Classified By: Ambassador William J. Burns for Reasons 1.4 (b/d)
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #08MOSCOW864.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
08MOSCOW864 | 2008-03-28 14:59 | 2011-01-31 21:30 | CONFIDENTIAL | Embassy Moscow |
VZCZCXRO7496
PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHMO #0864/01 0881459
ZNY CCCCC ZZH
P 281459Z MAR 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC PRIORITY 7385
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RHEHNSC/NSC WASHDC PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 04 MOSCOW 000864
SIPDIS
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT
EUR/CARC, SCA (GALLAGHER, SUMAR)
DOE FOR FREDRIKSEN, HEGBORG, EKIMOFF
DOC FOR 4231/IEP/EUR/JBROUGHER
E.O. 12958 DECL: 03/25/2018
TAGS: EPET ENRG ECON PREL PGOV RS
SUBJECT: WHAT'S BEHIND THE RAIDS ON TNK-BP AND BP REF: A. MOSCOW 816 B. MOSCOW 768 C. 07 MOSCOW 3054 Classified By: Ambassador William J. Burns for Reasons 1.4 (b/d)
------- SUMMARY -------
1.(C) The backdrop to last week's raid on TNK-BP is a tale of intrigues inside intrigues with speculation running rampant over who is behind the attacks and why. We may never know but our best guess is that it is ultimately a commercial struggle for control and ownership of a highly productive asset. That struggle has been on-going for some time and has two main threads. The first is the desire on the part of some of the Russian partners, billionaires all, to exercise greater control, and derive more of the profits, than BP. The second is the GOR's desire that Gazprom purchase the Russian half of the company -- Gazprom, naturally, wants a lower price, the Russian billionaires, if they have to sell, want a high price. Others see political motives and the chance to take a slap at the British as well. However, ultimately this is a story about billions and billions of dollars. End Summary
------------------- BILLIONAIRES VS. BP -------------------
2.(C) Various theories have been circulating among the oil and gas community as well as in the local press as to the motives behind the recent attacks (refs A and B) on TNK-BP, one of the world's ten largest oil companies. Prominent among these theories is in-fighting among the shareholders, especially between BP and its Russian billionaire partners. The TNK half of TNK-BP is shared between billionaires Viktor Vekselberg (Renova company - 12.5 percent), Mikhail Fridman, German Khan and Peter Aven (Alfa Group -- 12.5, 11, and 1.5 percent) and (Amcit) Lev Blavatnik (Access Industries -- 12.5 percent). The Russian billionaires, especially those from Alfa, are feuding with BP in a spat that goes back years. As one BP official told us when the company was forming, "We have a love-hate relationship. They love us (our money), and we hate them (their corporate governance and management styles)."
3.(C) According to a western TNK-BP official, the raids should be seen as the latest in this multi-year attempt to drive out or scare away the foreign managers of the company, which made nearly $9 billion in profits last year. Khan has traditionally led the charge to get rid of the western managers who have brought to the company western business practices such as accountable corporate governance, transparency, and fiscal discipline. In particular, senior western TNK-BP executives have pointed to the company's procurement as a sore point for Khan and to a lesser extent the other billionaires. TNK-BP spends several billion dollars a year on equipment and supplies. The BP half of TNK-BP has been able to limit directed purchases and kick-backs, much to the chagrin of some of their business partners. The former BP officials in the company also point to a contentious board meeting last fall at Fridman's Chateau in the south of France. When their prediction that declining investment would lead to falling production and profits proved prescient, the Alfa partners in particular used this to argue for a change in senior management.
4.(C) Threatening the visa status of the western employees in the company has been a favorite tactic xxxxxxxxxxxx These efforts appear to have culminated in a March 25 announcement that 148 of the BP employees seconded to TNK-BP would have to temporarily be removed from the company while their visa status is clarified. xxxxxxxxxxxx
5.(C) Adding another wrinkle to the in-fighting between the billionaires and BP is that the billionaires quarrel among themselves as well. The BP managers have a much better relationship with Vekselberg and Blavatnik. They regard Vekselberg as a serious businessman and one whom they hoped would be able to buy out the other Russian partners. Blavatnik has a limited operational role in the company, reducing scope for friction. The BP managers tell us that talk of one partner or another buying out the others has been going on for some time.
------------------------------------- GAZPROM TRYING TO SAVE A FEW BILLION? -------------------------------------
6.(C) The other widely circulated theory behind the FSB raid on TNK-BP is that it is an attempt by Gazprom to knock down the billionaires' price. Gazprom and the TNK half of TNK-BP have reportedly been negotiating for months over a price for the Russian half of the company. When TNK-BP was formed in 2003, the agreement stipulated that the Russian partners would not sell their shares until January 1, 2007, a date which was subsequently pushed back a year. Over the past six months, the western managers at TNK-BP have told us that the GOR would prefer to buy out the billionaires and bring the company more fully under state control. Moreover, they have told us that although Rosneft was mentioned early on as a potential partner, the GOR apparently decided that only Gazprom would be allowed to purchase the Russian half of the company.
7.(C) On the whole, BP is sanguine about this prospect. In their view, Gazprom would likely make a more reliable and predictable partner. The negotiations over the Kovykta gas field (ref C) led to Gazprom-BP negotiations over a global strategic tie-up that in turn puts the potential partnership in TNK-BP in a positive light. The most likely model would be the Sakhalin Energy Investment Corporation (SEIC). Although Shell was pressured into selling a majority share to Gazprom, it has been left to operate the company more or less as it sees fit. That said, Vladimir Konavalov, the head of the Petroleum Advisory Forum, told us it is possible that Gazprom may nonetheless want to reduce BP to a minority share in the company. A western TNK-BP official told us BP can live with this and that there is already a side deal in place once the purchase happens that would give Gazprom 50 percent plus one of the shares.
8.(C) The Russian billionaires on the other hand are not at all happy at the prospect of being forced to sell their shares and if push comes to shove they are determined to get the best price they can. Vladimir Milov, a former Deputy Energy Minister, told us that the GOR would prefer to avoid any hint of the Yukos affair in resolving TNK-BP's ownership. If the billionaires are forced to sell, they will get "market value." The question is who determines that market value? It will not be the market. However, it will not be Gazprom either. The billionaires have connections, influence, and above all cash with which to fight. One of the senior western TNK-BP executives told us recently that he was surprised the fight had gone on as long as it had and that it was apparent they had underestimated the billionaires. In particular, this official noted, the Alfa Group's Peter Aven appears to have considerable influence in the Kremlin. This official also noted that Gazprom is only interested in the whole of the Russian half, giving any of the billionaires an effective veto over the sale by, for instance, fomenting continuing uncertainty, as the Alfa Group may have done with these latest attacks.
9.(C) Vekselberg threw down the price gauntlet by publicly valuing the company at $60 billion late last year. This is not an arbitrary sum. The western executives at TNK-BP have told us that extrapolating from the small amount of shares currently traded publicly undervalues the company and that based on its reserves, production, and profits, Vekselberg's figure is close to the mark. The difference is considerable. However, based on those publicly traded shares (less than 3 MOSCOW 00000864 003 OF 004 percent of the total) the current market capitalization of the company is $27 billion, having dropped 10 percent following the raid. Depending on which valuation is used, Gazprom would have to pay either $3.5 or 7.5 billion dollars for each 12.5 percent stake, reason enough to fight.
10.(C) Adding grist to the theory that Gazprom is behind the investigation is the fact that under Russian law, it is the target of industrial espionage that must initiate the investigation by filing a complaint. Gazprom was almost certainly aware of TNK-BP's "Gazprom project" assessing it as a potential partner and may have chosen to use this to put pressure on the billionaires. Seen in this light, actions such as Mitvol's environmental review (ref A) are seen by many as part of a coordinated attack on the company to reduce its value and induce the sale of its Russian half.
-------------------- KREMLIN IN-FIGHTING? --------------------
11.(C) No conspiracy theory in today's Russia would be complete without some reference to the power struggle within the Kremlin, particularly in light of the impending change at the top. In a March 25 meeting, Ekho Moskvy Editor Aleksey Venediktov called the action by the FSB a warning shot to Medvedev. He speculated that very involvement of the FSB as evidence that the actions were tied to FSB Chief Patrushev and through him to Presidential Administration Deputy Sechin,s maneuvering during this political transition. Many Embassy contacts have in fact predicted a loss of influence for Sechin following the transition. Creating a scandal over TNK-BP could be a means for Sechin and his supporters to remind the President-elect of their ability to wreak political havoc. If such a scandal disrupts business dealings between Gazprom -- the rival to the siloviki-dominated Rosneft state oil company (which Sechin chairs) -- and Western partners, so much the better.
12.(C) There are, however, reasons to discount this theory. As we noted above, BP has told us that Rosneft is no longer a serious potential purchaser of the Russian half of TNK-BP. A senior western executive at Rosneft told us the same thing. In addition, many of the contacts with whom we discussed TNK-BP developments pointed out that FSB involvement isn't conclusive one way or the other. Any of the players in this game could have access to the FSB, including Gazprom and the Alfa Group.
------------------- A JAB AT THE BRITS? -------------------
13.(C) Given abysmal Russian-British bilateral relations, the press and some of our British counterparts, were quick to see an FSB raid on the highest profile British investment here as a politically motivated attack against the Brits. Ilya and Alexander Zaslavsky, the two brothers who were arrested in connection with the FSB's charges of "commercial espionage" were, respectively, heads of the Oxford-Cambridge and the British Council alumni associations. These linkages were widely publicized and embraced by many media outlets as being related to the raid on TNK-BP and BP offices.
14.(C) However, despite the prominent attention given in the press to the British angle of the story, it seems to us more likely that this is coincidental. Regardless of the state of the two countries political relations, the commercial relationship is very strong and has been largely fenced off by both governments. Some of our contacts said it was entirely possible that the connection to the British Council was simply a PR "bonus" for the FSB.
---------------------------- CONCLUSION: FOLLOW THE MONEY ----------------------------
15.(C) Fridman/Khan vs. Vekselberg, TNK vs. BP, TNK-BP vs. Gazprom, BP vs. Gazprom, FSB vs. Brits, and siloviki vs. siloviki. A BP official told us last week that this situation will probably be "messy for a while". That seems a safe bet. Our sense is that this is ultimately a MOSCOW 00000864 004 OF 004 multi-faceted fight for control and ownership of a multi-billion dollar company, which BP and its executives at TNK-BP are caught in the middle of. We'll probably never knew who ordered the raid and why or who ordered the Zaslavsky brothers' arrest and why. What we will eventually know, to paraphrase Churchill, is which bulldog emerges from under the carpet with the prize. We think it will be Gazprom, but it may take longer than they would like. BURNS