BP threw down the gauntlet to its Russian partners yesterday, saying that the group would not be forced out of its troubled joint venture.

“We intend to hold our ground and we are not going to be intimidated,” Tony Hayward, the chief executive of BP said in an interview with The Times.

But despite the rhetoric, Robert Dudley, TNK-BP’s American chief executive, remains in hiding outside Russia as speculation grows that his abrupt departure was triggered by fears of imminent arrest. Mr Hayward said that he had been forced to leave because of a refusal by the Russian authorities to grant him a visa and investigations by state security agents.

But BP insisted these attacks were not being directed by the Kremlin.

Mr Hayward said that AAR, the consortium of four Russian oligarchs, which has been BP’s 50-50 joint venture partner in TNK-BP since 2003, had been manipulating low-level elements of the Russian state for its own purposes.

He said that Mr Dudley had been left with no choice but to withdraw because the intimidation had become so intense that he was starting to fear for his safety. However, there were no plans for any of the other foreign executives working at TNK-BP to leave Moscow.

Many former BP employees remain in Russia, including Tim Summers, TNK-BP’s chief operating officer; Tony Considine, executive vice-president of its downstream business; Rich-ard Herbert, the technology chief; and Tom Wright, executive for planning and performance. Dozens of other, more junior managers remain, although all of BP’s 148 secondees have now been pulled out after a row over visas.

Mr Hayward also firmly rejected AAR’s repeated claims that the row was about poor performance. He said that Russia’s third-largest producer of crude oil, had enjoyed stellar growth since its formation. “TNK-BP has the highest reserve replacement ratio and lowest development costs of any oil company in Russia. This is not about performance. It is a dispute between shareholders – I genuinely believe they want to take control of the company to change its strategic direction.”

AAR has insisted that its efforts to oust Mr Dudley have been driven by his failure to act in the interests of all shareholders and because of weak financial performance. Privately, BP fears that if the Russian partners from AAR succeed in gaining management control, they will use TNK-BP to extract as much cash as they can from the business, probably by selling some of its assets.

They also accept that while Mr Dudley may be able to exert management control over the company for three or four months, the chances of him being able to do so for much longer are remote.

However, Mr Hayward gave little indication as to how BP intends to resolve the dispute, declining to comment on discussions regarding ownership. But he did insist that BP intends to stay in Russia for the long term.

“This has been a very successful investment for BP,” he said, adding that the group would use every means at its disposal to protect its investment. BP’s external legal team, led by Linklaters, is already examining a variety of options to attack AAR. The oil company has filed a lawsuit in London claiming that the Russian shareholders are liable for £181.2 million in taxes.

A claim form, which names Alfa Petroleum Holdings Limited and OGIP Ventures Limited as defendants, was filed at the High Court on June 30. It claims BP is owed money under a tax deed of covenant agreed on August 29, 2003.

According to the document, BP first demanded payment in a letter dated March 19, 2007. It followed up with similar requests on August 1, December 24 and May 9 – none of which was met.

Separately, BP is set to report record second-quarter profits on Tuesday, boosted by surging oil prices of nearly $150 per barrel.

Analysts are forecasting net profits, excluding exceptional items, of about $7.6 billion (£3.8 billion) for the quarter to June 30, up from $5.3 billion a year ago.

Runaway prices and a recovery in BP’s refining business were cited as the main reasons for the improvement. However, the results are likely to be overshadowed by the situation at TNK-BP.

Shares on the Russian stock exchange fell almost 6 per cent yesterday, as investors fretted that Mr Dudley’s departure indicated a new low for foreign investment in Russia.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4402549.ece