BP shares down as Russian problems resurface

LONDON Thu Jul 21, 2011 5:31am EDT

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LONDON (Reuters) - Shares in British oil major BP (BP.L) traded down on Thursday after a spat with partners in its Russian joint venture TNK-BP TNBP.MM flared up again.

BP's oligarch co-owners in TNK-BP have restarted tribunal proceedings aimed at securing a ruling that BP broke their shareholders' agreement -- a ruling that could make BP liable for billions of dollars in damages -- sources close to both sides said.

AAR, the consortium representing the Russian billionaires, is arguing a planned share swap and Arctic exploration venture between BP and Kremlin-controlled Rosneft broke the TNK-BP shareholder agreement which obliges BP to use TNK-BP as its primary vehicle for investment in Russia.

The planned tie-up collapsed in May, in the face of AAR's opposition.

AAR is now arguing BP's actions cost TNK-BP $5-10 billion in lost opportunities, by not executing the deal through TNK-BP, and because the collapse poisoned TNK-BP's relationship with Rosneft, something which could cost it future deals.

The Russian side believes one way out could be for BP to sell AAR its stake in TNK-BP.

"The offer to buy them out is still on the table," said a source close to the Russian side who said BP had rejected an offer earlier this year, of $25 billion for its half-share in TNK-BP.

A BP spokesman declined to comment on the arbitration but said the company had no plans to sell out of TNK-BP.

"We are committed to the joint venture which continues to perform well," the spokesman said.

Company insiders are dismissive of the AAR claims, arguing that TNK-BP has not suffered any losses.

AAR wrote to the tribunal asking for a September hearing to rule on whether BP broke the shareholder agreement, the source close to the group said.

On Wednesday, a lawyer for a little-known minority shareholder, a TNK-BP subsidiary, said it had won a Russian court ruling that could open the way for TNK-BP to seek $5-$10 billion in damages over BP's failed bid to partner with Rosneft (ROSN.MM).

BP shares traded down 0.8 percent at 0901 GMT, against a 0.4 percent drop in the STOXX Europe 600 Oil and Gas index .SXEP.

(Additional reporting by Douglas Busvine in Moscow; Editing by Dan Lalor and David Hulmes)

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