TNK-BP management calls for suit against BP

TNK-BP, BP’s joint venture in Russia, has said it generated $2.3bn (£1.4bn) in net profit in the third quarter, 57 per cent up on the same period in 2010, as output and the price of oil have risen.

Its management have caused fresh headaches for BP chief executive Bob Dudley, though, by calling on the TNK-BP board to sue BP for billions of dollars in damages over BP's failed alliance with state-controlled rival oil firm Rosneft.

Russia’s third-biggest oil company, TNK-BP accounts for a fifth of BP’s production and saw revenues rose 34 per cent to $15.3bn and it cut its net debt to $5.1bn from $5.3bn a year earlier.

But sources told Reuters that the TNK-BP board will be asked to join litigation which has been started by a small shareholder in listed unit TNK-BP Holding, which is due to be heard in a court in the Russian oil town of Tyumen on November 10.

"The management board has recommended to the board to consider doing this and it is expected that when it (the board) meets in November this issue will be discussed," one source close to the local shareholders said.

The Russian shareholders in TNK-BP are already pushing for an arbitration ruling that BP would be liable for what could be billions in dollars of damages for pursuing the deal with Rosneft in violation of a shareholder agreement under which TNK-BP is accorded the right of first refusal on BP deals in Russia.

The current litigant in Tyumen, shareholder Andrey Prokhorov, is claiming $13bn in damages against BP and a further $2.7bn against two BP nominees on the board of TNK-BP Holding for not involving TNK-BP in the Rosneft deal.