Russian affiliate of embattled BP sees profits soar

27th July 2010, Comments 0 comments

TNK-BP, the Russian joint venture of embattled oil giant BP, announced on Tuesday that its profits for the first half of this year soared over 20 percent to 2.4 billion dollars (1.86 billion euros) on rising production.

TNK-BP, seen as one of the British firm's most valuable assets, is jointly owned 50 percent by BP and 50 percent by a group of Russian billionaires who at one time were involved in a bitter power struggle with the energy giant.

BP announced on Tuesday that as a part of the management reshuffle prompted by the devastating Gulf of Mexico oil spill, outgoing BP chief executive Tony Hayward will be nominated as a non-executive director of TNK-BP.

"During the first six months of 2010, TNK-BP continued the track record of strong operating and financial performance," said one of its Russian owners, billionaire Mikhail Fridman, who is acting TNK-BP chief executive.

"This is the 11th successive quarter of production growth, supported by continued development of new projects in West and East Siberia.

"This set of results once again confirms the company's growth potential going forward," he added.

Revenues for the first half rose to 20.7 billion dollars from 14.5 billion the year earlier. Net profits rose to 2.4 billion dollars from 2.0 billion in the same period last year.

TNK-BP was hit by a major management dispute in 2008 that threatened the future of the joint venture when its then chief executive Robert Dudley was accused of damaging the Russian shareholders' interests.

However the dispute was patched up after Dudley's departure and the shareholders agreed to appoint Maxim Barsky TNK-BP chief executive effective from 1 January 2011, with Fridman taking the reins in the interim.

Ironically, BP announced on Tuesday that Dudley would be replacing Hayward as the overall BP chief executive.

© 2010 AFP

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