BP Amoco to Review Operations in Russia

BP Amoco, which has invested more than $1 billion in Russia, said that it would review its operations in the country after an asset it partly owns was sold against its will. Russia’s Tyumen Oil Co. bought bankrupt oil company Chernogorneft for about $176 million at a bankruptcy auction despite protests from its owners. The sale was seen as a test case for determining the future of foreign investment in Russia. BP Amoco, one of Russia’s biggest foreign investors, has repeatedly said that Chernogorneft and Sidanko, its parent company in which BP Amoco owns 10%, are viable companies whose debts could be restructured. The loss of Chernogorneft is the latest in a series of blows to BP Amoco in Russia, and casts doubt over Russia as an investment destination. Many potential foreign investors take the view that if a large, wealthy and internationally experienced company such as BP Amoco cannot make a success of investing in Russia, then others are unlikely to do better. BP Amoco’s American depositary receipts closed up $1.06 at $61.06 on the NYSE.