for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Deals

TNK-BP row hurts Russia image: EU trade chief

MOSCOW (Reuters) - A row between BP BP.L and Russian shareholders over their TNK-BP TNBPI.RTS joint venture is creating a bad image for investment in Russia, European Trade Commissioner Peter Mandelson said.

“I regret very much any instance, for example in the case of TNK-BP, where tempers seem to have flared, where language has suddenly run out of control,” Mandelson, on a visit to Moscow, told Reuters in an interview late on Wednesday.

“What this is doing is creating a bad image, an untypical, unrepresentative image of investment in Russia, but no less damaging for that, because it goes all the way around the world. This has got to be resolved speedily.”

The Russian billionaire shareholders who own half of TNK-BP say they will file law suits against co-owner BP, arguing the British company is trying to seize control of the venture.

BP denies this and has alleged the Russian shareholders are behaving like corporate raiders. It said last week it was disappointed the Kremlin had not intervened to resolve the dispute.

The boardroom battle has alarmed investors and cast a shadow over TNK-BP, a unit that accounts for a quarter of BP’s worldwide output and 20 percent of its reserves.

The outcome of the dispute is widely seen as a litmus test for the investment climate in Russia under new President Dmitry Medvedev, who has promised to make respect for property rights and the rule of law a theme of his presidency.

Writing by Christian Lowe; Editing by David Cowell

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up