TNK-BP shareholders prepare $5-10 bn BP suit

12th May 2011, Comments 0 comments

A shareholder of BP's Russian joint venture said Thursday said he had filed papers in preparation for a suit seeking up to $10 billion in damages from the British giant over its proposed tie-up with Rosneft.

The news came as BP counts down the hours to a Monday deadline to complete a historic Russian alliance that could either help reverse the company's flagging fortune or deliver another painful blow to its chief Bob Dudley.

Russia's Supreme Arbitration Court website said that TNK-BP shareholder Andrei Porkhorov's papers were filed in the western Siberian region of Tyumen on May 4.

A court official told Interfax that Prokhorov planned to seek $5-10 billion in damages from two divisions of BP but that his initial request to get access to the company's computer data had been denied.

Court records showed that separate papers were filed by Prokhorov and others against Peter Charow and Richard Scott Sloan -- BP's regional director for Russia and TNK-BP chairman of the board.

Prokhorov told Dow Jones Newswires said his rights as a shareholder were "violated by TNK-BP and BP".

He added that a formal suit had not yet been filed but that "we're considering it".

BP has until Monday to complete a $16 billion share-swap agreement with Rosneft that had initially also been due to include a deal to jointly develop Arctic oil reserves controlled by the Russian firm.

The Russian partners in the TNK-BP joint venture managed to block the Arctic portion of the agreement in court by arguing that it broke their shareholder agreement.

They also threatened to sue BP for damages after an arbitration panel ruled that TNK-BP had the right of first refusal on all of the BP's Russian projects.

BP had been planning to use TNK-BP dividend payments to finance the Arctic exploration work.

A revised deal negotiated under arbitration and announced by BP last week will potentially allow TNK-BP to take its parent company's place in the exploration project.

But Russia's state-controlled Rosneft has previously refused to work jointly with the local venture because of its relative inexperience and lack of access to international markets and deposits.

Rosneft has not commented on the terms of the revised deal.

© 2011 AFP

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