Markey Calls on Treasury Dept. to Review National Security Impacts of BP-Russia Deal

Washington D.C. (January 19, 2011) -- In response to the $16 billion share-swap announced last week between BP and state-owned Russian oil company Rosneft, today Rep. Edward J. Markey (D-Mass.) sent a letter to Treasury Secretary Timothy Geithner requesting that the Committee on Foreign Investment in the United States (CFIUS) begin an immediate review of BP-Rosneft transaction to determine whether it will threaten U.S. national security. The proposed deal would give Rosneft a 5 percent stake in BP, valued at $7.8 billion, and reportedly make the Russian national oil company the single largest BP stakeholder.

"I believe that there is clearly sufficient evidence that this deal may pose an unacceptable threat to U.S. national security to warrant CFIUS review," writes Rep. Markey, the Ranking Democrat on the House Natural Resources Committee and a senior Democratic member of the House Energy and Commerce Committee. "I therefore urge you to initiate a review by CFIUS of the proposed transaction between BP and the Russian state-owned energy company Rosneft as soon as possible."

In the letter, Markey sites several areas of national security concern. BP is the largest producer of oil and natural gas in the United States and is the fourth largest oil refiner in the United States. BP is also one of the largest producers on the North Slope of Alaska and also owns a significant interest in the Trans Alaska Pipeline System (TAPS), responsible for delivering North Slope oil to consumers in the lower 48 states. In addition, Rep. Markey requests that CFIUS assess the implications of the transaction for future oil and gas exploration in the Arctic region.

The letter also notes that BP is the single largest supplier of fuel to the U.S. military, providing nearly 12 percent of the all fuel purchased by the military in FY 2009.

"As we continue U.S. operations in Iraq and Afghanistan, CFIUS must closely scrutinize the implications for our military operations of allowing a Russian national company to become the largest stakeholder in BP," writes Rep. Markey in the letter.

Markey's letter points out that state-owned Russian energy companies have demonstrated a willingness to cut off energy supplies during confrontations. In 2009, a disagreement between the Russian gas company Gazprom and a Ukrainian energy company prompted Gazprom to shut down supplies of natural gas running through the Ukraine, which ultimately affected 18 European countries.

"State-owned Russian energy companies have demonstrated a willingness to cut off energy supplies during confrontations," said Markey. "CFIUS must ensure that the BP-Rosneft transaction does not expose the United States to similar threats."