Jeremy Warner's Outlook: Hayward must urgently address the Russian farce, even if it means selling

Robert Dudley, chief executive of the Russian oil major, TNK-BP, has decided to jump before he could be pushed. After months of wrangling, Mr Dudley has quit Russia, but aims to continue running the company from outside the country.

BP's Russian oligarch partners in TNK-BP are not yet there in getting their way over management control and strategy, but they certainly seem to be winning the battle. BP has already been forced to withdraw 148 technical staff. Now the chief executive has gone too. The idea that Mr Dudley can realistically run the company from the US, where he will be basing himself, is ridiculous.

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Has the time come for BP to cut its losses, quit Russia altogether, sell up and apply the proceeds either to a capital return to shareholders or more welcoming shores elsewhere?

Tony Hayward, chief executive of BP, has no emotional attachment to the Russian assets. It was his predecessor, Lord Browne, who re-embraced the Russian bear, so there would be no humiliation for Mr Hayward in negotiating an exit. What's the point in staying, given the manifest hostility not just of the company's partners but, by the look of it, the Kremlin too? By doing nothing to stop the attacks on BP, President Medvedev seems to be signalling his approval.

Selling up would indeed be the logical conclusion if TNK-BP were not such a vital part of the group. At 25 per cent of reserves – though, because of Russian taxes, a rather smaller proportion of profits – this is not an asset BP can afford to lose.

In the five years since the joint venture was set up, BP has more than got back in dividends the $8bn it put into the business, but, given what's happened to the oil price over that period, the returns have hardly been outstanding. Nor is there any obvious buyer for the assets at a reasonable price. Having said they might be prepared to buy-out BP, the oligarchs have since gone cold on the idea, though there is no doubt a price at which they would be prepared to talk. As for the state-run oil and gas concerns of Rosneft and Gazprom, they too don't yet seem ready to take control of the company.

An impasse has been reached. Given that the oligarchs appear unwilling to compromise to any degree, it is not clear how it might be resolved. The same gang cheated BP out of its last involvement in Russia's bountiful supply of hydrocarbons. The shareholder agreement set up to govern TNK-BP was meant to prevent the same thing happening again.

Perhaps it is indeed water-tight, but the Russians have turned to other methods to get their way. We can all beat the table about the iniquities of it all, and how the Russians are only cutting their own throats on foreign investment by allowing BP to be victimised in this way, yet, whatever the wider principles involved, the harsh reality for BP is that it has to find a solution. Perhaps there is none. Unfortunately for him, Mr Hayward is doomed to try.