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BP To Part With $400M

BP may have to repay its Russian venture, TNK-BP, more than $400 million after a minority shareholder sued in Siberia to annul an employment contract between the two oil producers

BP may have to repay its Russian venture, TNK-BP, more than $400 million after a minority shareholder sued in Siberia to annul an employment contract between the two oil producers.

Under an agreement allowing TNK-BP to hire BP specialists, TNK-BP paid an average $685,000 per worker, including salary, housing, travel and schooling costs, per year, BP spokesman Vladimir Buyanov said Thursday by telephone.

The venture hired about 150 specialists over the past two years, fewer than when it was formed in 2003, he said.

Shareholder Tetlis has demanded that the accord be scrapped and that BP return all payments received from TNK-BP, according to court documents viewed by Bloomberg. The payments reduced TNK-BP's profit available as dividends, while the parent company benefited from both, according to the documents. Buyanov declined to comment on Tetlis' claims.

"We consider the recent legal claim to stop BP specialists working in TNK-BP to be damaging to all our shareholders," TNK-BP chief executive Robert Dudley said Thursday.

"The service we receive for BP specialists contains no element of profit for BP — it is on a cost recovery basis only," Dudley said. TNK-BP employees who are contracted to work internationally with BP receive similar compensation packages, paid for by BP, he said.

Tetlis bought about 0.13 percent of TNK-BP Holding shares in April. TNK-BP Holding had profit of more than $5 billion last year on sales of more than $38 billion, Dudley said last month.

Tetlis CEO Alexander Tagayev declined to comment on the claims Thursday. His lawyer Eduard Karyukhin also declined to comment, citing confidentiality, when called in Tyumen.

BP is under pressure after the Federal Security Service searched the company's Moscow office earlier this week, two months after a similar raid.

The Russian shareholders rejected a $20 billion bid for their 50 percent earlier this year from Gazprom, which is now offering less, Energy Intelligence said Thursday, citing sources with knowledge of the situation.