????Norex claims in its lawsuit that TNK did two things to seize control of Yugraneft. First, in 1998 a TNK-related creditor sued Chernogorneft for an unpaid bill. When both Chernogorneft and BP offered to pay the bill, the creditor refused to take the money. With an outstanding bill, Chernogorneft was forced into what Norex claims was a ginned-up bankruptcy.
????BP was so worried about the proceedings that the company prevailed on then Prime Minister Tony Blair to intervene. Blair wrote a letter to Vladimir Putin in September of 1999, expressing his dismay. "[BP fears] that what should and could be a healthy and profitable company will be manipulated into bankruptcy and collapse," Blair wrote. "The case… will be critical to future in-flows of foreign direct investment, so vital to Russian economic revival."
????But a regional judge – whom Norex says in its complaint was appointed by "TNK's then Chairman" -- ultimately declared Chernogorneft bankrupt.
????Norex alleges that TNK then took control of the Chernogorneft bankruptcy auction. Only TNK-related companies were allowed to participate in the closed auction. When Sidanco officials obtained court orders to postpone the proceedings, armed guards blocked bailiffs from delivering the documents, according to a declassified CIA memo obtained by Norex. TNK ultimately bought the assets for just $176 million, about a third of the company's worth, according to the memo.
????"We regard the entire bankruptcy process as invalid," Howard Chase, BP Russia's then-director of external affairs wrote in an email. Chase, who is now Director of International Affairs for BP (BP), also wrote: "We understand that the fun went on right to the end. Sidanco officials were prevented by armed guards from entering the Chernogorneft offices to serve an injunction – just another day in Russia!"
????Norex's stake in Yugraneft dwindled, and was eventually taken by force, according to the complaint. "Two days later… [TNK official Alexander Berman], six TNK attorneys, and sixteen TNK militia members dressed in fatigues and carrying AK-47 machine guns forcibly entered Yugraneft's corporate offices, falsely declared that Berman had been elected Yugraneft's General Director, and took control over Yugraneft's oil filed. On July 6, 2001, [TNK's private armed militia members] cut off Yugraneft's phone and Internet service, and occupied Yugraneft's oil field and field office, causing Yugraneft's foreign employees to flee the country."
A calculated risk
????After TNK took control of the Yugraneft oil field, documents show that BP officials were worried. "If a reversal of this illegal sale cannot be achieved... then we need to prepare to exit Sidanco over the next month," Mike Townshend, a longtime BP executive, wrote in an email to fellow executives in the fall of 1999.
