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26

BP Heads To Solve Russia's Ploblems with Putin

Lord Browne and Tony Hayward, his designated successor as head of BP, wil meet Russian president Vladimir Putin tomorrow

Lord Browne and Tony Hayward, his designated successor as head of BP, will meet Russian president Vladimir Putin tomorrow in order to try to head off potential problems in the country, a Russian spokesman for BP said.

While the spokesman declined to say what the three men would discuss, sector watchers said the future of the BP-TNK joint venture, which has been driving production growth for BP, would be bound to figure large in the discussions.

The meeting comes amid persistent speculation that the authorities in the country are manoeuvring for BP's Russian partners in the TNK-BP venture to sell out to a state-controlled firm like Gazprom or Rosneft.

While TNK-BP and the partners in the venture have denied that they want to sell out, Gazprom has said it would buy into the operation if it got the chance.

After welcoming international firms with open arms in the last century when the then heavily-indebted country was desperate to attract expertise, the Russian authorities have been keen to increase their share of the wealth generated from the country's vast reserves.

During an official visit to Moscow in February, Industry Minister Alistair Darling said he had urged Russian ministers to respect the sanctity of foreign investments, and had raised concerns about the treatment of BP and Shell's ventures in the country.

TNK-BP has come under pressure from officials over the giant Kovykta gas field for failing to produce the agreed volumes of gas.

Russia threatened to revoke the Kovykta licence in May, a move which analysts have said may be part of an attempt to force the Russian partners out of TNK-BP.

However, Robert Dudley, chief executive of TNK-BP, has repeatedly denied suggestions that the venture could be under threat.