AAR takes a swing at BP with a divi freeze

City A.M. Reporter
BP’S oligarch co-owners in TNK-BP blocked a $1bn (£634m) dividend from the Russian oil business yesterday, signalling a new low for a troubled relationship that is heading for divorce.

The decision by the AAR consortium, grouping tycoons Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, comes after the British oil firm put its 50 per cent stake in TNK-BP up for sale in June.

BP has reaped $19bn in dividends from Russia’s third-largest oil producer since it was created in 2003 from the merger of its Russian operations with those of the oligarchs – more than double its original investment.

But the relationship between the partners, shaky for years, has deteriorated badly since BP tried to team up with Rosneft in early 2011.

While AAR chief executive Stan Polovets said the move was “prudent” during a period of market uncertainty, the timing will be viewed as a jab at BP during its sale negotiations.

However, analysts said neither side would lose out on cash that would stay in the business.