BP slams Russian 'corporate raid'

TNK-BP accounts for a quarter of BP's worldwide oil production

BP has claimed its Russian partners are trying to take control of a joint venture reminiscent of 1990s-style "corporate raiding activities".

The Russian partners in TNK-BP plan to take BP to court, reports suggest, after demands for greater influence in the boardroom were rejected.

The Russian co-owners claim that their UK counterparts wield too much power.

But BP's chairman has accused the billionaires who own the Russian arm of trying to control TNK-BP.

"This is a return to the corporate raiding activities that were prevalent in Russia in the 1990s," said BP chairman Peter Sutherland.

"Prime Minister Putin has referred to these tactics as relics of the 1990s, but unfortunately our partners continue to use them," he said.

Power struggle

AAR, which owns the Russian half of the joint venture, is set to take the case to the International Arbitration Court in Stockholm, an official for AAR told Reuters.

Negotiations between BP and its Russian partners ended after the UK firm rejected a Russian deadline, said Reuters, citing sources close to BP.

TNK-BP, formed in 2003, is Russia's third-biggest oil producer.

It accounts for a quarter of BP's worldwide oil production and is seen as a model of foreign investment in Russia.

Investors worldwide are watching this case as a test of conditions for foreign companies operating in Russia under the leadership of President Dmitry Medvedev.

There have been ongoing tensions between BP and the four Russian businessmen that head up AAR, and the Russian government.

Russian shareholders are demanding, among other things, the resignation of the joint venture's chief executive Robert Dudley arguing that he has only been concerned with BP's interests.

E-mail this to a friend

Printable version