TNK-BP Minorities Get First Victory Against BP

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A court in Tyumen has ordered U.K. oil major British Petroleum and its joint venture TNK-BP Holding to release required documents to the attorney of the OJSC TNK-BP Holding minority shareholders in preparation for a lawsuit related to a proposed alliance with OAO Rosneft.

In May a deal between BP and Russian state oil company Rosneft to form a strategic alliance collapsed, as BP’s Russian partners in TNK-BP insisted that BP must pursue all projects in Russia through the joint venture. TNK-BP tried to replace BP in the deal with Rosneft, which included developing three Arctic offshore blocks and a $16 billion share swap, but BP directors on the TNK-BP board voted against that proposal.

In May, The Tyumen Region Commercial (Arbitrazh) Court rejected the shareholders' motion seeking access to documents from BP and TNK-BP. On July 19, 2011, the court admitted a claim from Andrei Prokhorov and a group of individuals (all of them are minority shareholders of the TNK-BP Holding) to secure evidence prior to a lawsuit against Peter Anthony Cherow and Richard Scott Sloan, members of the Board of Directors of OJSC TNK-BP Holding.

The Court granted the minority shareholders’ claim to provisionally secure the evidence and issued a ruling ordering OJSC TNK-BP Holding, OJSC TNK-BP Management and BP Exploration Operating Company Ltd. to release the required documents as listed to the attorney of the OJSC TNK-BP Holding minority shareholders within two weeks for subsequent transfer to the Tyumen Region Arbitrazh Court.

“We believe that OJSC TNK-BP Holding suffered significant losses as a consequence of actions by Peter Anthony Cherow and Richard Scott Sloan, who made it impossible for the TNK-BP Holding to participate in the strategic alliance with Rosneft. According to preliminary estimates, the Company’s losses could amount to several billion US dollars. The documents, which we had to demand through the Court, are necessary to determine the exact amount with assistance from professional appraisers and prepare the lawsuit”, said Dmitriy Chepurenko, a partner of Law Firm Liniya Prava (attorneys for the minority shareholders), in response to the court’s ruling.

Once the minority shareholders complete their review of the documents they intend to file a lawsuit.