Russian parterns threaten to sue BP

21st April 2011, Comments 0 comments

BP's woes deepened on Thursday when the local tycoons of its Russian joint venture announced plans to sue the British giant over its bid to forge an alliance with state firm Rosneft.

"We are looking into this option very seriously," the Interfax news agency quoted TNK-BP co-owner Viktor Vekselberg as saying.

"We are examining every avenue available to us," Vekselberg said.

Various Russian and Western reports said the eventual suit may seek between $5 and $10 billion in compensation from BP for its planned tie-up with Russia's biggest oil company.

The Russian billionaires who own half of TNK-BP argue that they have a right of first refusal on any deal that BP strikes in Russia and that the British side tried to keep the merger secret until the last moment.

Several arbitration panels have sided with the tycoons and BP-Rosnet's $16 billion share-swap and joint Arctic exploration agreement is now up against an extended May 16 deadline for the deal to close.

BP's fortunes had already taken a hit a day earlier when Prime Minister Vladimir Putin -- who personally signed of on the deal in January -- confirmed that he had no plans to intervene on behalf the embattled British giant.

Vekselberg said the suit may be filed within the next two weeks after it is approved by the company's board.

He added that the court action will be taken both in the British Virgin Islands where TNK-BP is registered as well as in Britain itself.

BP did not respond to the tycoon's announcement. It has already confirmed that it had made a buyout offer to the Russian billionaires in a bid to end the dispute.

But the reported $27 billion offer was rejected and Vekselberg said on Wednesday that the Russian partners "do not want to sell."

Vekselberg also noted that the Russian partners were not in contact with Rosneft over any buyout terms -- a comment suggesting that talks are currently in a stalemate.

BP had been hoping to use the Arctic deal to rescue its fortunes following an oil spill in the Gulf of Mexico last year that dented the company's image and hurt its potential to explore for oil off the US coast.

© 2011 AFP

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