BP hit with $3.1b Russian court bill

AFP, 29 July 2012

A Siberian court on Friday piled more legal pressure on BP by ordering the British group to pay $3.1 billion in damages for its attempted Arctic oil exploration tie-up with the state giant Rosneft.
A BP attorney immediately denounced the decision as a ‘corporate attack’ that demonstrated the court’s subservience to the Russian government’s wishes.
The ruling came just days after BP entered direct talks with Rosneft over a buy-out by Russia’s largest oil company of the British firm’s stake in the troubled TNK-BP joint venture it co-owns with four local tycoons.
A lawyer for minority TNK-BP shareholder Andrei Prokhorov — the unheralded plaintiff at the heart of Russia’s biggest business court case — said the 100-billion-ruble ruling was issued against London-based BP plc and its BP Russia Investment Limited venture.
‘We are fully satisfied,’ attorney Dmitry Chepurenko said by telephone from the oil-producing region of Tyumen.
Prokhorov — owner of just 0.0000106 per cent of a venture responsible for nearly a third of BP’s oil — denies acting on behalf of the powerful oligarchs who operate their half through the Alfa Access Renova consortium.
AAR successfully blocked the Arctic deal in a European court of arbitration by arguing that BP had an obligation to offer TNK-BP priority rights to any operations it would like to conduct across the country and Ukraine.
Prokhorov said TNK-BP Holding suffered from unrealised gains by being shut out of the $16 billion share-swap and joint exploration venture.
The Arctic venture eventually went to the US super-major ExxonMobil. TNK-BP for its part reported a slump in second quarter profits Friday to $808 million from $2.2 billion last year due to lower prices and higher export taxes on old fields.
The Siberian ruling will make no immediate financial impact on BP because it can still fight it in higher courts — a process that Prokhorov’s attorney said could take ‘at least’ six months.