TNK-BP problems won't be fixed soon

By Michele Kambas

LIMASSOL, Cyprus (Reuters) - Oil major BP (BP.L) and its four billionaire partners in Russian joint venture TNK-BP appear no closer to resolving a conflict over management after a board meeting in Cyprus on Friday, sources told Reuters.

A source who attended the meeting of TNK-BP, a holding company which controls 95 percent of the listed Russian entity TNK-BP Holding (TNBPI.RTS), told Reuters the dispute between the rival shareholders about the future of Russia's No. 3 oil producer would not be decided soon.

This raised concerns among investors that the year-long struggle could be prolonged. The remaining 5 percent of TNK-BP Holding is owned by minority shareholders.

"I don't think soon. Not soon," the source said on condition of anonymity, when asked if the dispute at TNK-BP would soon be resolved.

TNK-BP Holding has been wracked by a struggle between BP and its four Russia-connected partners over management control and future strategy. Investors are following the case for clues to the investment climate in Russia under President Dmitry Medvedev.

The quartet of billionaires, represented by the AAR consortium, want to fire the BP-backed chief executive of TNK-BP, Robert Dudley, whom they accuse of poor performance and favouritism toward BP.

BP says Dudley is acting in the interests of both groups of shareholders and accuses the Russians of an attempt to seize control of the venture.

BP spokesman David Nicholas described the board meeting, which took place in the Cypriot port of Limassol, as business-like and cordial. But he declined to give details, saying the results of the meeting would be made public on Monday.