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BP will ‘work to resolve’ Russian dispute as profits jump

BP will ‘work to resolve’ Russian dispute as profits jump 

By Telegraph staff and agencies

Last Updated: 9:13am BST 29/07/2008



BP said this morning that it would continue to try and resolve a dispute with the billionaire shareholders of the company’s Russian oil joint venture, as it reported an almost 30pc rise in second-quarter profits.

  BP chief executive officer Tony Hayward
BP CEO Tony Hayward

Referring to the battle between Russian shareholders of TNK-BP, and its British chief executive Robert Dudley, BP said: “BP continues to work to resolve these matters. It is not possible to predict the outcome if these matters remain unresolved.”

Viktor Vekselberg, Mikhail Fridman, German Khan and Len Blavatnik – known collectively as AAR – have demanded Mr Dudley’s dismissal for treating the venture as a subsidiary of the UK oil producer.

In the latest twist to the protracted saga, Mr Dudley left Russia on Thursday, claiming that “sustained harassment” and his inability to obtain a work visa led him to decide that running the business from an undisclosed location outside the country was the best option.

BP made the latest comments as it revealed net income climbed to $9.47bn (£4.7bn) from $7.38bn in the second quarter last year, as crude oil hit record prices and natural gas prices also increased.

Shares rose 3pc to 533.5p this morning.

Chief executive Tony Hayward, who took over from Lord Browne last year, is counting on the start-up of the long-delayed Thunder Horse field in the Gulf of Mexico to boost output growth as the bitter dispute threatens BP’s joint venture in Russia. Like its rivals, BP has benefited as oil futures hit $147 for the first time last month.

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  • “The startup of new projects at the time of very high oil prices gives a big kicker to earnings,” Ivor Pether of Royal London Asset Management.

    BP is planning to bring more than 25 projects onstream between 2007 and 2009 that will add about 650,000 barrels a day of oil equivalent to output.

    BP’s shares have gained 14pc in the second quarter, lagging behind a 19pc gain for larger rival Shell.

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