

Currently released so far... 12553 / 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
2011/05/01
2011/05/02
2011/05/03
2011/05/04
2011/05/05
2011/05/06
2011/05/07
2011/05/08
2011/05/09
2011/05/10
2011/05/11
2011/05/12
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
APECO
ASEC
AMGT
AFIN
APER
ACABQ
AORC
AEMR
AF
AE
AR
AGMT
AU
AY
ABLD
AS
AG
AJ
APCS
AX
AM
AMEX
ATRN
ADM
AMED
AFGHANISTAN
AZ
AL
ASUP
AND
ARM
ASEAN
AFFAIRS
AQ
ATFN
AMBASSADOR
AODE
APEC
ACBAQ
AFSI
AFSN
AO
ABUD
AC
ADPM
ADCO
ASIG
ARF
AUC
ASEX
AGAO
AA
AER
AVERY
AGRICULTURE
AIT
AADP
ASCH
AORL
AROC
ACOA
ANET
AID
AMCHAMS
AINF
AMG
AFU
AN
ALOW
ASECKFRDCVISKIRFPHUMSMIGEG
ACS
ADANA
AECL
ACAO
AORG
AGR
BEXP
BR
BM
BG
BL
BA
BTIO
BO
BP
BC
BILAT
BK
BU
BD
BRUSSELS
BB
BF
BBSR
BIDEN
BX
BE
BH
BT
BY
BMGT
BWC
BTIU
BN
CA
CASC
CFED
CO
CH
CS
CU
CE
CI
CM
CMGT
CJAN
COM
CG
CIS
CVIS
CR
CKGR
CHR
CVR
COUNTER
CIA
CLINTON
CY
CPAS
CD
CBW
COUNTERTERRORISM
CITEL
CDG
CW
CODEL
COUNTRY
CLEARANCE
COE
CN
CARICOM
CB
CONDOLEEZZA
CWC
CACS
CSW
CIDA
CIC
CITT
CONS
CL
CACM
CDB
CDC
CAN
CF
CJUS
CTM
CBSA
CARSON
CT
CLMT
CBC
CEUDA
CV
COPUOS
CTR
CROS
CAPC
CAC
CNARC
CICTE
CBE
ECON
ETRD
EIND
ENRG
EC
ELAB
EAGR
EAID
EFIS
EFIN
EINV
EUN
EG
EPET
EAIR
EU
ELTN
EWWT
ECIN
ERD
EI
ETTC
EUR
EN
EZ
ETC
ENVI
EMIN
ET
ENVR
ER
ECPS
EINT
EAP
ES
ENIV
ECONOMY
EXTERNAL
EINN
EFTA
ECONOMIC
EPA
EXBS
ECA
ELN
ETRDEINVECINPGOVCS
ENGR
ECUN
ENGY
ECONOMICS
ELECTIONS
EIAR
EINDETRD
EREL
EUC
ECONEFIN
EURN
EDU
ETRDEINVTINTCS
ECIP
ENERG
EFIM
EAIDS
EK
ETRDECONWTOCS
EINVETC
ECONCS
EUNCH
ESA
ECINECONCS
EUREM
ESENV
EFINECONCS
ETRC
ENNP
EAIG
EXIM
EEPET
EINVECONSENVCSJA
EUMEM
ETRA
ERNG
ETRO
ETRN
EINVEFIN
ICTY
IN
IS
IR
IC
IZ
IA
INTERPOL
IAEA
IT
IMO
IO
IV
ID
IRAQI
IEA
INRB
IL
IWC
ITU
ICAO
ISRAELI
ICRC
IIP
IMF
IBRD
ISLAMISTS
ITALY
ITALIAN
ILO
IPR
IQ
IRS
IAHRC
IZPREL
IRAJ
IDP
ILC
ITF
ICJ
IF
ITPHUM
INMARSAT
ISRAEL
IACI
IBET
ITRA
INR
IRC
IDA
ICTR
IGAD
INRA
INRO
IEFIN
INTELSAT
INTERNAL
INDO
ITPGOV
KWMN
KSCA
KDEM
KTFN
KIPR
KCRM
KPAL
KE
KPAO
KPKO
KS
KN
KISL
KFRD
KJUS
KIRF
KFLO
KG
KTIP
KTER
KRCM
KTIA
KGHG
KIRC
KU
KPRP
KMCA
KMPI
KSEO
KNNP
KZ
KNEI
KCOR
KOMC
KCFC
KSTC
KMDR
KFLU
KSAF
KSEP
KSAC
KR
KGIC
KSUM
KWBG
KCIP
KDRG
KOLY
KAWC
KCHG
KHDP
KRVC
KBIO
KAWK
KGCC
KHLS
KBCT
KPLS
KREL
KCFE
KMFO
KV
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFTFN
KVPR
KTDB
KSPR
KIDE
KVRP
KTEX
KBTR
KTRD
KICC
KCOM
KO
KLIG
KDEMAF
KMRS
KRAD
KOCI
KSTH
KUNR
KNSD
KGIT
KFSC
KHIV
KPAI
KICA
KACT
KHUM
KREC
KSEC
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCMR
KPIN
KESS
KDEV
KNAR
KNUC
KPWR
KENV
KWWMN
KWMNCS
KPRV
KOM
KBTS
KCRS
KNPP
KWNM
KRFD
KVIR
KTBT
KAID
KRIM
KDDG
KRGY
KHSA
KWMM
KMOC
KSCI
KPAK
KX
KPAONZ
KCGC
KID
KPOA
KIFR
KFIN
KWAC
KOMS
KCRCM
KNUP
KMIG
KNNPMNUC
KERG
KTLA
KCSY
KJUST
MOPS
MARR
MASS
MNUC
MX
MCAP
MO
MR
MI
MD
MK
MA
MP
MY
MTCRE
MOPPS
MASC
MIL
MTS
MLS
MILI
MAR
MU
MEPN
MAPP
MTCR
MEPI
MZ
MEETINGS
MG
MW
MAS
MT
MCC
MIK
ML
MARAD
MV
MERCOSUR
MTRE
MPOS
MEPP
MILITARY
MDC
MQADHAFI
MUCN
MRCRE
MAPS
MEDIA
MASSMNUC
MC
NZ
NZUS
NL
NU
NATO
NP
NO
NIPP
NE
NH
NR
NA
NPT
NI
NSF
NG
NSG
NAFTA
NC
NDP
NEW
NRR
NATIONAL
NT
NS
NASA
NAR
NV
NORAD
NSSP
NK
NPA
NGO
NSC
NATOPREL
NW
NPG
NSFO
OPDC
OTRA
OIIP
OREP
OVIP
OSCE
OEXC
OIE
OPRC
OAS
OPIC
OTR
OMIG
OSAC
OFFICIALS
OECD
OSCI
OBSP
OFDA
OPCW
ODIP
OFDP
OES
OPAD
OCII
OHUM
OVP
ON
OIC
OCS
PHUM
PREL
PGOV
PINR
PTER
PARM
PREF
PM
PE
PINS
PK
PHSA
PBTS
PRGOV
PA
PORG
PP
PS
PGOF
PL
PO
PARMS
PKFK
PSOE
PEPR
PAK
POL
PPA
PINT
PMAR
PRELP
PREFA
PALESTINIAN
PBIO
PINF
PNG
PMIL
PFOR
PUNE
PGOVLO
PAO
POLITICS
PHUMBA
PSEPC
PTBS
PCUL
PROP
PNAT
PNR
POLINT
PGOVE
PROG
PHALANAGE
PARTY
PDEM
PECON
PROV
PHUMPREL
PGOC
PY
PCI
PLN
PDOV
PREO
PGIV
PHUH
PAS
PU
POGOV
PF
PINL
POV
PAHO
PRL
PG
PRAM
POLITICAL
PARTIES
POLICY
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PGGV
PHUS
PSA
PHUMPGOV
PEL
PSI
PAIGH
POSTS
PBT
PTERE
RS
RU
RW
RM
RO
RP
REGION
RSP
RF
RICE
RCMP
RFE
RIGHTS
RIGHTSPOLMIL
ROBERT
RUPREL
RELATIONS
ROOD
REACTION
RSO
REPORT
SENV
SNAR
SCUL
SR
SC
SOCI
SMIG
SI
SP
SU
SO
SW
SY
SA
SZ
SAN
SF
SN
STEINBERG
SG
ST
SIPDIS
SNARIZ
SNARN
SSA
SK
SPCVIS
SOFA
SAARC
SL
SEVN
SARS
SIPRS
SHUM
SANC
SWE
SHI
SYR
SNARCS
SPCE
SYRIA
SEN
SH
SCRS
SENVKGHG
TRGY
TSPL
TPHY
TSPA
TBIO
TI
TW
THPY
TX
TU
TS
TZ
TC
TH
TT
TIP
TO
TERRORISM
TRSY
TINT
TN
TURKEY
TBID
TL
TV
TNGD
TD
TF
TP
TFIN
TAGS
TK
TR
UNSC
UK
UNGA
UN
US
UNHRC
UG
UP
UNMIK
UNHCR
UE
USTR
UNVIE
UAE
UZ
UY
UNO
UNESCO
USEU
USOAS
UV
UNODC
UNCHS
UNFICYP
UNEP
UNIDROIT
UNDESCO
UNDP
UNPUOS
UNC
UNAUS
USUN
UNCHC
UNCHR
UNCND
UNICEF
UNCSD
UNDC
USNC
USPS
USAID
Browse by classification
Community resources
courage is contagious
Viewing cable 08MOSCOW1775, INSIDER VIEWS OF TNK-BP DISPUTE
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. #08MOSCOW1775.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
08MOSCOW1775 | 2008-06-20 15:34 | 2011-01-31 21:30 | CONFIDENTIAL | Embassy Moscow |
VZCZCXYZ0000
OO RUEHWEB
DE RUEHMO #1775/01 1721534
ZNY CCCCC ZZH
O 201534Z JUN 08
FM AMEMBASSY MOSCOW
TO RUEHC/SECSTATE WASHDC IMMEDIATE 8719
INFO RHEHNSC/NSC WASHDC IMMEDIATE
RUEHXD/MOSCOW POLITICAL COLLECTIVE PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
C O N F I D E N T I A L MOSCOW 001775
SIPDIS
STATE FOR EUR/RUS; NSC FOR MWARLICK
E.O. 12958: DECL: 06/20/2018
TAGS: ECON EINV ETRD PREL PGOV RS
SUBJECT: INSIDER VIEWS OF TNK-BP DISPUTE
REF: MOSCOW 1713
Classified By: CDA Daniel A. Russell for Reasons 1.5 (b) and (d).
------- Summary -------
1.(C) In meetings on June 18 and 19 with TNK-BP CEO Robert Dudley and Renaissance Capital's Deputy Chairman Robert Foresman (both Amcits), visiting NSC Senior Director for Russia Mary Warlick and EUR/RUS Director Kelly heard first hand accounts of the complicated, opaque and increasingly acrimonious dispute over control of the world's seventh largest oil company. Dudley said negotiations had largely broken down with BP's Russian partners in TNK-BP and with Gazprom on a global partnership. He said the Russian partners were resorting to ever more extreme tactics to gain control of the company, including the continued use of state administrative resources, and that Russian government intervention was needed to broker a settlement. He expressed appreciation for U.S. efforts to encourage GOR intervention. Separately, Foresman, whose company advises BP, attributed the freeze in negotiations over the Gazprom-BP global alliance to the influence of Deputy Prime Minister Sechin and suggested that Sechin's company, Rosneft (where he serves as Chairman of the Board), may ultimately emerge as BP's partner in TNK-BP. End Summary.
------------------- A Worsening Dispute -------------------
2.(C) Dudley told Warlick and Kelly that negotiations had largely broken down and that BP's partners, AlfaAccessRenova (AAR), were using increasingly extreme tactics in their efforts to take control of the company. He likened their tactics to the dark days of the 1990s, when Russian businesses used "corporate raiding" methods to take control of assets at prices well below market. Although the GOR claimed to be taking a "hands-off" approach to what it was describing as a "shareholder's dispute." In fact, according to Dudley, the AAR partners were using their influence and wealth to enlist the administrative resources of state entities on their behalf.
3.(C) Warlick responded that the USG was tracking the dispute closely and was concerned not only about BP's investment and the effect of the dispute on Russia's investment climate but also about Dudley's personal safety. Dudley responded that because of the structure of the company, he was the focal point of the attacks. As the CEO, he had authority over all decision-making. He said that if he were taken out of the equation, the AAR partners would achieve their objective of gaining control and would be able to do whatever they wanted with the company's assets to the detriment of other shareholders, including BP. He expected the attacks on him to continue in the form of law suits and the like but said that while the situation was wearing on him, he believed his profile was too great for there to be any physical threat against him.
-------------------------- AAR PR Campaign Succeeding --------------------------
4.(C) Dudley acknowledged that the AAR public relations campaign was resonating within Russia and especially within the GOR. In particular, claims that BP was holding Russia back by inhibiting one of its largest companies from expanding abroad and competing directly with BP appealed to Russian nationalism and the country's sense of itself as victims of the West. Likewise, the claims that BP had foisted large numbers of expatriate employees on TNK-BP, in jobs that could be performed by Russians, also appealed to Russian nationalism. The success of this public relations campaign was likely to make the AAR partners even less inclined to seek a compromise solution with BP.
5.(C) Dudley explained, however, that in fact there was little substance to AAR's claims. The number of expatriates in TNK-BP was less than 250 out of a total of 66,000 employees. Of those, only 110 were permanent TNK-BP employees and of those only 40 had ties to BP. As to international expansion, it was true that BP's preference was to invest in Russia and the FSU, where TNK-BP had competitive advantages. Dudley said the AAR partners, by contrast, were interested in expanding to places like Myanmar, Cuba, and Sudan, which posed problems for BP given U.S. and other Western sanctions.
6.(C) In addition, Dudley said AAR and, in particular, German Khan, had been systematically using TNK-BP resources to vet these projects xxxxxxxxxxxx. This particular dispute arose when Dudley said he had refused to allow Khan to continue to have these projects vetted by TNK-BP.
--------- Deadlines ---------
7.(C) Dudley said there were two important approaching deadlines: June 26, when a shareholders meeting was to be held for TNK-BP holding, which included minority shareholders, and which was to approve the accounts for TNK-BPs regional subsidiaries and renew the mandates of their Board of Directors; and, late July, when his work permit and those of the senior Western managers in TNK-BP were due to expire. He suspected that the AAR partners might attempt to prevent the Board meeting. If it were not held, the result would be two-fold: lawsuits from minority shareholders for failure to receive dividends and anarchy in the operations of the subsidiaries, which would allow their AAR-allied heads to begin stripping assets in the absence of any effective oversight.
8.(C) As to the visas, Dudley said he had submitted a new list to the Federal Migration Service (FMS), which included the senior Western management and also restored the names of the BP secondees that Khan had removed earlier. Dudley said he planned to meet soon with the FMS and hoped to have the issue resolved at that time.
----------------------- GOR Intervention Needed -----------------------
9.(C) Dudley said Russian Government intervention was needed to convince the AAR partners to negotiate in good faith. However, in that regard, he said he had heard rumors that to curry favor with the Kremlin the AAR partners had agreed to export TNK-BP's crude oil through a trading company close to the Kremlin. (Comment: He most likely meant Gunvor, whose head is reportedly a close personal friend of Prime Minister Putin.) In addition, Dudley indicated that BP's talks with Gazprom about a global partnership had been put on hold because of a power struggle within the governing elite, with officials connected with Rosneft objecting to the partnership. He said he had also heard that the GOR was considering letting the two sides fight each other to exhaustion, like "Siberian tigers," and then capture the survivor to create a third Russian major oil company (in addition to Rosneft and Lukoil).
10.(C) Dudley added that whatever the GOR's motivation, it seemed oblivious to the effect the dispute was having on the country's reputation among foreign investors. He noted that at the recent St. Petersburg Economic Forum the government had made all the right noises about creating a good investment climate, including by fighting corruption and improving the rule of law. However, the GOR's failure to address the dispute was undermining that message. Dudley said he was being constantly approached by current and prospective investors who were deeply disturbed by the government's official inaction in the face of individual Russian businessmen using state resources against a foreign partner.
--------- U.S. Role ---------
11.(C) Warlick noted that the reputational issue had been raised by Commerce Secretary Gutierrez in St. Petersburg and that the U.S. would look for other opportunities to raise our concerns, including meetings with GOR officials this week. Dudley responded that Secretary Gutierrez's efforts on BP's behalf had been deeply appreciated. He hoped that the G-8 meetings in Japan and Treasury Secretary Paulson's visit to Moscow later in the month would provide additional senior-level opportunities to drive home USG concerns. Warlick responded that it would be important for all G8 leaders to reinforce the message with Medvedev. Dudley agreed and said BP was approaching other Western countries to weigh in as well.
----------------------------- RenCap: Rosneft the Solution? -----------------------------
12.(C) In a separate meeting with Robert Foresman, RenCap's Amcit Deputy Chairman said that his firm had been advising BP for some time on its business activities in Russia. Foresman said the Gazprom-BP partnership would have been extremely profitable for both companies and had been blessed at the highest levels of the Russian Government, by Putin himself. What BP and Gazprom had envisioned was an ambitious global partnership in which they would share equity stakes in specific Gazprom and BP assets, as well as a joint venture partnership in TNK-BP. Gazprom would buy out AAR's 50 percent share of TNK-BP and receive one additional share from BP for a majority stake, but BP would continue as the operating partner. Foresman's view was that Gazprom CEO Miller had been given responsibility for making this deal happen and that Miller had fumbled the ball by taking too long and failing to engage successfully with the AAR partners about their stake.
13.(C) Foresman said Gazprom's failure to move quickly had opened the door to the AAR partners, who had seized control of the process of reconfiguring the company in an effort to extract maximum value if forced to sell. He said it was clear the AAR partners were not negotiating in good faith. For instance, it had been Alfa's Mikhail Fridman who had initiated the discussion of AAR trading its stake in TNK-BP for shares in BP. Fridman had then publicly attributed this idea to BP in an effort to further discredit the company in Russia.
14.(C) Foresman said Gazprom's delay had also opened the door to Igor Sechin who, from his new perch as the Deputy Prime Minister in charge of the energy sector, saw a chance to promote the fortunes of his company, Rosneft, at the expense of its rival, Gazprom. Sechin, according to Foresman, had seen Gazprom's expansion into the oil business via ownership of the Russian half of TNK-BP as a challenge to Rosneft's position as Russia's national champion for oil, and had moved to block the takeover and the broader Gazprom-BP partnership. xxxxxxxxxxxx
15.(C) Foresman said RenCap had also run the numbers on a BP partnership with Rosneft. It was not as mutually profitable as the Gazprom tie-in, nor as significant globally, but was looking increasingly attractive to BP under the current circumstances. Moreover, BP had bought a substantial stake in Rosneft during its IPO two years ago, a stake that had already risen by 60 percent in the interval. Foresman predicted that a Rosneft buy-out of the AAR partners was now the most likely outcome of the dispute and the one most beneficial to BP. Foresman added under that scenario Dudley would likely be out, replaced by someone acceptable to both sides such as Rosneft's current CEO, Amcit Peter O'Brien. RUSSELL