* UK court move should not derail deal, Rosneft says
* To return to paying dividend, payout set at 7 cents
* CEO expects to settle dispute with TNK-BP partners
* BP says to sell Texas City refinery, site of fatal blast
* BP's shares lag rivals, close up 1.3 pct
(releads, adds detail on UK court order)
By Tom Bergin and Sarah Young
LONDON, Feb 1 BP's (BP.L) existing Russian
partners won a UK court bar on its planned Arctic oil venture
with state-controlled Rosneft (ROSN.MM) on Tuesday, prompting
conciliatory offers from the British oil company.
The dispute reinforced concerns about BP's recovery from
last year's Gulf of Mexico oil spill as it also reported weaker
than expected fourth quarter results, disappointing oil
production guidance and a new $1 billion oil spill charge.
Concerns about the row and its recovery overshadowed BP's
much-anticipated return to paying dividends.
BP's shares recouped earlier lossess to close up 1.3 percent
at 491 pence, but still lagged a 3 percent rise in the STOXX
Europe 600 Oil and Gas index .SXEP which was driven by oil
prices exceeding $100 a barrel.
AAR, the holding vehicle of BP's oligarch partners in
TNK-BP, had argued that BP's Arctic exploration deal and share
swap with Rosneft breached a previous BP commitment to seek AAR
approval before entering into any major new Russian venture.
Under the order handed down by a London court on Tuesday,
the two parties have agreed to try to have the issue resolved by
an arbitrator by Feb. 25, BP said in a statement.
A Rosneft spokesman said the court move should not derail
the deal, and both BP and oil sector analysts expressed
confidence the dispute would eventually be resolved.
"We did expect the injunction to be granted, but we also
think that the final resolution of this dispute will be reached
between the Russian partners and the state, not in the courts,"
said Chris Weafer, chief strategist at UralsIB in Moscow.
BP's CEO Bob Dudley, who ran TNK-BP until he was forced to
flee Russia after a previous spat with the billionaires turned
hostile, said the oligarchs could be placated via a financial
settlement, by BP including TNK-BP in the exploration venture,
or by BP offering TNK-BP some other strategic help.
BP has sought to put last year's Gulf of Mexico oil spill
disaster firmly behind it and on Tuesday held out the prospect
of long-term growth via new exploration partnerships and a fresh
focus on discovering oil and gas.
Yet guidance for another 11 percent drop in output in 2011,
after a 9.4 percent drop in 2010, left some analysts questioning
BP's "shrink to grow" strategy.
"BP's future pace of development in the Gulf of Mexico now
looks highly uncertain in the wake of Macondo. We also would
highlight the uncertainty in the U.S. unconventional gas
business," Alastair Syme at Citigroup said in a research note.
BP said it would pay a fourth-quarter dividend of 7 cents
per share and 42 cents per American depositary share -- in line
with analysts' expectations, but only half of what it was paying
before the spill disaster.
"The re-introduction of the dividend is good news for
investors (even at its much lower level), but it is likely to
prove inflammatory to U.S. Gulf Coast senators whose communities
are still being impacted by the spill," Youngson said.
POLL-Rosneft 2010 net profit seen up 60 pct [ID:nLDE70R1C1]
TAKE A LOOK-Russia tries fresh start [ID:nLDE70Q1Y9]
Exxon (XOM.N) results [ID:nN30169616]
TAKE A LOOK-Brent stays above $100 on Egypt [ID:nN31231869]
BP said fourth-quarter replacement cost net income was $4.61
billion, up from $3.45 billion a year ago, as a big rise in oil
prices outweighed a 9 percent drop in oil and gas production.
Brent oil LCOc1 stayed above $100 a barrel on Tuesday, a
level hit this week for the first time since October 2008. U.S.
prices CLc1 were above $90 and were boosted, like Brent, by
concerns that deadly civil unrest in Egypt could spread to
Middle East crude producers or disrupt Suez canal flows.
Dudley said BP was watching the situation carefully.
BP had deliberately declined to issue production goals as
the oil group was targeting value not volumes, he added.
Excluding one-off items of $250 million, BP's replacement
cost net income came in at $4.36 billion, behind the $5.09
billion average forecast from nine analysts polled by Reuters.
BP's results were in contrast to a better-than-expected
increase in quarterly profit at Exxon Mobil Corp (XOM.N) on
The net income measure excludes gains or losses related to
changes in the value of oil inventories and is comparable with
U.S. net income.
BP said the weaker-than-expected results were partly due to
a higher-than-expected tax rate. Exxon, on the other hand, saw
its results helped by a lower tax rate.
BP is still feeling pain from the oil spill, adding another
$1 billion to its earlier $40 billion estimate of the total
bill. Analysts had recently started to cut their estimates for
the cost of the oil spill.
Offering a pointer to future growth, BP said it would sell
two refineries in the United States, inlcuding the Texas City
plant, where 15 workers died in an explosion in 2005 -- an
accident which ruined BP's carefully nurtured green image.
The sale would halve BP's refining capacity in the U.S., and
invest more in oil and gas exploration.
The group said it would increase significantly its
investment in exploration and would seek new partnership
opportunities. It also said it was on track to meet its target
of up to $30 billion of divestments by the end of 2011.
(Writing by Sophie Walker; Editing by Alexander Smith and