Crunch time for BP over Russia

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The Independent Online

Minority shareholders are to decide tomorrow whether to take legal action against TNK-BP, the British oil giant's recently formed $6.75bn (£4.3bn) Russian venture.

Investors are angry about the way they have been treated by BP and its Russian partner TNK. The decision will be taken after a conference call. One investor, Ian Hague of New York-based investment fund Firebird, said he favoured legal action.

He added: "Going by what the other members of the group that I have spoken to have said, everyone is in favour. This is the only language they understand."

Mr Hague said the group had spoken to a lawyer in Russia who was prepared to take on the case for free. Should the group decide to go ahead with the action, its next move would be to talk to lawyers in the UK and US. The shareholders are keen to pursue any action in the West.

The investors originally bought into TNK and Sid-anco, the Russian oil company that was part-owned by BP and is now part of TNK-BP. They owned around half of TNK's free float, believed to be between 3 and 4 per cent of the outstanding shares before the creation of TNK-BP at the end of August.

The shareholders do not believe they are being treated fairly by either TNK or BP and fear they could suffer severe losses on their investments.

A BP spokesman declined to discuss the matter other than to comment: "All the parties involved in the transaction have agreed that good corporate governance is important, including respec- ting the rights of minority shareholders."