Abramovich oil firm 'disingenuous', says former partner Sibir

The AIM-listed oil explorer Sibir Energy hit out at Roman Abramovich's Sibneft oil giant yesterday as the dispute between the two companies over a joint venture intensified.

The AIM-listed oil explorer Sibir Energy hit out at Roman Abramovich's Sibneft oil giant yesterday as the dispute between the two companies over a joint venture intensified.

The latest twist in the saga came with the publication of Sibneft's 2003 annual accounts which revealed that the group controlled 99 per cent of the Sibneft-Yugra joint venture it has with Sibir. The shareholder structure of the venture was originally a 50-50 split but Sibir discovered earlier this year that it had been diluted down to just 1 per cent without its consent. The group's shares were suspended in April as it moved to restore its holding.

Yesterday, Henry Cameron, Sibir's chief executive, accused Sibneft of having behaved in a "disingenuous" manner in the dispute. He said that Sibneft first claimed it knew nothing of the dilution, only for it to emerge this week that it had greatly benefited from it. "Sibneft now admits what they have clearly known all along, namely that they were the beneficiaries of the dilution wrongfully inflicted on Sibir," he said.

Sibir said that the dilution executed at the Sibneft-Yugra was illegal and that it will do its best to restore its 50 per cent shareholding, which presently stands at just 1 per cent.

Sibneft,controlled byChelsea football club's owner, Roman Abramovich, and a number of associates, was quick to deny that it had anything to do with the original dilution of the Sibneft-Yugra, which it says took place in 2002, a year after it was set up to explore the oil reserves of the Priobskoye field in Siberia. Mr Abramovich's company said it acquired the 49 per cent stake, which took its total holding in Sibneft-Yugra to 99 per cent, from a third party in 2003. It was unclear who this third party is or whether it was involved in the dilution.

The person most affected by the setback at Sibir is its largest shareholder, the Russian businessman Chalva Tchigirinski. He controls 40 per cent of the group via his Isle of Man-registered vehicle, Bennfield. There are also a number of UK institutional investors that will be left out of pocket. Among them is Charlemagne Capital and M&G Investment Management.

Shares in Sibir were suspended at 28p at the company's request and are tipped by analysts to fall sharply once they are re-listed on London's junior market. Mr Tchigirinski said: "Sibir's interest in Sibneft-Yugra has been misappropriated and we will have it back."

But analysts believe he and his company face a lengthy legal battle in the Russian courts, which are not known for their efficiency. Meanwhile, the dispute further dents Russia's reputation in the eyes of investors, which is struggling to recover from news at the start of the week that the government plans to seize the assets of Yukos, the country's biggest company.