BP’s Russian partners put block on $1bn oil dividend

The decision by the AAR consortium, grouping tycoons Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, comes after the British oil firm put its 50 per cent stake in TNK-BP up for sale last month.

BP has reaped $19bn in dividends from Russia’s third-largest oil producer since it was created in 2003 from the merger of its Russian operations with those of the oligarchs – more than double its original investment.

But the relationship between the partners, which was shaky for years, has deteriorated badly since early 2011.

The block means both BP and AAR are deprived of payment while the future of the venture remains uncertain.

However, analysts said it was an expected move, and that neither side would lose out on cash that would stay in the business.

In a statement, AAR said its directors voted against the dividend because during “continuing market uncertainty and while corporate governance at TNK-BP remains strained,” a cautious stance by shareholders was called for.

TNK-BP said last week its second-quarter net profit fell to $808m from the $2.2bn seen a year ago.

BP said it would continue to press for payouts from the business.

“It’s a matter of good governance,” said a spokesman. “It’s money that rightfully belongs to our shareholders.”

Last year, dividends from TNK-BP accounted for $3.7bn of its $22.2bn of cashflow.

BP said that dividends from TNK-BP are one of many sources of its operating cash flow and do not directly fund BP’s own dividends to its shareholders.

“We are confident that the money will remain in the company and that we can ensure it is correctly deployed in the future,” BP said.