TNK-BP Russian owners to block BP’s $1 bn dividend

The Russian shareholders of Russian-British oil joint venture TNK-BP said Monday they would block BP’s billion-dollar dividend for the fourth quarter in protest at its landmark deal with Rosneft.

TNK-BP is jointly owned 50 percent by the British oil giant and 50 percent by its Russian shareholders — a consortium of three Russian businessmen including billionaire banker Mikhail Fridman.

BP and Rosneft earlier this month agreed to form a joint venture for Arctic oil exploration and take a cross-shareholding.

But the Russian owners of TNK-BP have filed a complaint with a London court — set to be heard Tuesday — seeking to block the deal on the grounds that the BP-Rosneft tie-up violates the TNK-BP shareholder agreement.

Taking the shareholder dispute a step further, the director general for the Russian shareholders, known collectively as Alfa Access Renova (AAR), said that the dividend was being withheld.

“The decision for the moment is not to approve the dividends for the fourth quarter,” Stan Polovets told AFP.

Sources have said that the issue has been raised due to a “lack of clarity over TNK-BP’s perspectives” after Rosneft’s deal with BP.

The Kommersant daily said with the total dividend for the fourth quarter estimated at $1.8 billion, BP risks losing out on almost $1 billion as it recovers from the effects of the Gulf of Mexico oil spill.

TNK-BP almost imploded once before during a venomous shareholder conflict in 2008 but its co-owners then made peace and it is seen as one of the crown jewel assets of the British company.

Under the terms of the deal signed in London earlier this month, Rosneft will hold five percent of BP’s ordinary voting shares in exchange for approximately 9.5 percent of Rosneft’s shares.

BP and Rosneft will explore and develop the Russian firm’s three licensed blocks on the Arctic continental shelf — 125,000 square kilometres, said to contain five billion tonnes of oil and 3.0 trillion cubic metres of gas.

Reports said the Russian shareholders believe that the BP-Rosneft deal violates the shareholder agreement which commits the parties to carry out all their projects in Russia and Ukraine through TNK-BP and are also unhappy they were not informed about negotiations.