2nd UPDATE: BP Takes TNK-BP Shareholder to Arbitration
August 09 2011 - 8:48AM
Dow Jones News
Less than three months after BP PLC's (BP) Russian billionaire
partners in TNK-BP Ltd. derailed an Arctic alliance with Russia's
top state oil company, the U.K. oil major is now hitting back at
its partners, accusing one of them of violating their shareholder
agreement.
A spokesman for Soviet-born business tycoon Viktor Vekselberg,
who holds a 12.5% stake in the TNK-BP oil joint venture through his
Renova Holding, said BP filed the arbitration notice Friday. The
notice alleges that Renova violated the shareholder agreement
between BP and Alfa-Access-Renova, or AAR, the consortium of
billionaires who jointly control TNK-BP with the U.K. energy
giant.
The move to fire back at its partners in the TNK-BP joint
venture comes after BP's attempt to form a strategic alliance with
Rosneft collapsed in May, following a legal victory by its partners
in TNK-BP.
The billionaire partners claimed the Rosneft deal, which
included an Arctic exploration project and a $16 billion share
swap, would violate the TNK-BP shareholder agreement that requires
BP and AAR to offer TNK-BP any energy proposals in Russia before
working with others.
A person close to BP said Friday's notice is part of an ongoing
arbitration case initiated by Alfa-Access-Renova. In a move
designed to win billions of dollars in compensation from BP for
alleged damage done to the joint venture, the Russian partners have
asked a Stockholm arbitration panel to rule on whether the U.K.
company breached their shareholder agreement when pursuing the
tie-up with Rosneft.
"The arbitration is still ongoing and this forms part of it. The
arbitration panel has never ruled on the breach," said the person,
who asked not to be named. "It's the same arbitration hearing as
before - it never stopped."
BP alleges that Vekselberg exceeded the shareholder terms by
holding large natural gas and fuel assets through his IES Holding
Ltd., Russia's largest private power supply company.
The Renova spokesman maintained that the holding company hasn't
violated the terms of the TNK-BP shareholder agreement.
BP Tuesday declined to confirm or deny whether a notice of
arbitration had been filed.
"The fact that BP is only now instigating proceedings leads us
to believe that it might be building a defense against potential
further attacks from AAR," said Dmitry Loukashov, analyst at VTB
Capital.
In May, the parties were close to a deal under which BP and
Rosneft would have bought out AAR's stake in TNK-BP for more than
$32 billion in cash and stock. But the transaction collapsed at the
last minute over legal disagreements. BP and AAR both acknowledge
talks on a buyout are unlikely to be revived.
-By Jacob Gronholt-Pedersen and Alexis Flynn, Dow Jones
Newswires; +7 495 232 9197; jacob.pedersen@dowjones.com
(William Mauldin in Moscow contributed to this story.)