TNK-BP, the joint venture between BP and Russian oligarchs, is mulling a halt to $1.8 billion in dividend payments as the dispute between the Russian venture and Europe's second-largest oil company over the latter's $16 billion share swap with OAO Rosneft, Russia's state-run oil producer, intensifies.
This is not the first time TNK-BP and BP (BP) have knocked heads. In 2008, BP CEO Bob Dudley was removed his post atop TNK-BP and forced to leave Russia after the Russian investors argued with Dudley over strategy for the venture.
Last week, a legal group representing TNK-BP shareholders filed with a London court to block BP's deal with Rosneft. TNK-BP says the deal violates the exclusivity provisions of TNK-BP's shareholder agreement and may erode the competitive advantage and value of their venture, according to Bloomberg News.
TNK-BP accounts for 25% of BP's output and 20% of its reserves. AAR, the group representing TNK-BP in is legal action against BP, is expected to meet on Sunday to further discuss the plan to halt the dividend. TNK-BP Investments Ltd., the 50-50 venture, had planned to pay at least $4.8 billion in dividends for 2010, or about $5.6 billion if the venture doesn?t acquire BP assets in Venezuela and Vietnam, Bloomberg reported.