BP’s Russian partners plot to block dividends

BP’s RUSSIAN partners are attempting to derail the payment of the firm’s final dividend payment of last year in a row over exploration contracts.

AAR, a vehicle for the billionaires who own half of Russian venture TNK-BP, said at an extraordinary board meeting yesterday that it plans to block TNK-BP interim dividends amounting to $1.8bn (£1.1bn), which are due to be paid this month.

The issue threatens to undermine BP’s full-year results, which are announced this morning.

AAR called for the block after BP signed a $16bn share swap deal and exploration contract with Russian state-owned oil firm Rosneft without its participation in the project.

The TNK-BP board, led by chief executive Mikhail Fridman, will meet on 18 February to decide whether to withhold dividend payments.

Alfa Petroleum, a subsidiary of AAR, will also today learn whether it has been granted an injunction in the London High Court to stop BP progressing further with the joint venture. A BP spokesman said: “The normal time for discussing dividends is at regular board meetings. In the meantime, we’re trying to resolve this matter, in as businesslike manner, as soon as possible.”

TIME LINE | BP IN RUSSIA

1997: BP pays $571m (£357m) to acquire a 10 per cent stake in SIDANKO, Russia's fifth largest oil company at the time.

2003: BP establishes its Russian joint-venture, TNK-BP, the largest foreign investment in Russia, after a merger between TNK, SIDANKO and Onako and most of BP's Russian oil assets.

March 2008: Russian police raid the offices of BP and TNK-BP in Moscow and question managers. Officials say they were investigating a $40m tax evasion involving SIDANKO.

July 2008: TNK-BP’s Russian shareholders AAR threaten BP with legal action over director powers.

July 2008: Russian authorities say TNK-BP boss Bob Dudley can no longer stay in the country on his temporary visa. Dudley leaves a month later, blaming a campaign of harassment.

January 2009: BP relinquishes TNK-BP board authority to the AAR group

January 2011: BP announces $16bn share swap with Russia’s state-owned oil group Rosneft.