Oil firm attack may cast pall over PM's visit Gunpoint takeover

Mike Trickey Southam News OTTAWA - The gunpoint takeover of a Canadian oil company last week in Siberia is threatening to cast a shadow over Prime Minister Jean Chrйtien's goodwill trip to Russia next week.

Mr. Chrйtien is travelling to Moscow in support of Toronto's bid for the 2008 Olympic Games, but the armed attack on the offices of a Calgary-based firm is moving to the top of things to talk about when he meets with Vladimir Putin, the Russian President, on Friday.

Eight men armed with machine guns forced their way into the offices of Yugraneft, an oil company 98% owned by Calgary-based NoreX Petroleum, and installed new management.

"Four Jeeps came with another 15 [men] with machine guns and took the perimeter," Alex Rotzang, NoreX's chief executive, told CBC News.

Mr. Rotzang said the new managers now control the company's computers and have access to its bank accounts.

"They are going to drain the bank accounts and ship the money off-shore," he said.

Canadian officials describe the episode as a "major negative signal" to foreign investors.

Rodney Irwin, Canada's ambassador to Russia, immediately sent a letter of complaint to Russian Deputy Prime Minister Viktor Krishtenko, who with Pierre Pettigrew, the Canadian Minister for International Trade, co-chairs the bilateral International Economic Commission. Mr. Pettigrew followed up with a similar letter on Wednesday, but so far Canadian officials have received no response.

"We're obviously following this issue very closely," said Mr. Chrйtien's spokesman Duncan Fulton.

Mr. Rotzang said he has been fighting a losing battle against the powerful Tyumen Oil Company for years. He has been embroiled in a lawsuit seeking compensation for 70,000 tonnes of oil borrowed from Yugraneft in the early 1990s but never repaid. He says Yugraneft has won court judgments previously, but they are either overruled by another court or compensation is set at about 10% of real value.

"I would like the Prime Minister to tell Mr. Putin ... that we're looking for their legal system to work," Mr. Rotzang said in an interview.

Mr. Putin, at a news conference during a visit to Canada in December, shrugged off complaints about Russian business practices.