BP may close deal with Russian co-owners "in weeks"

By Michael Stott

MOSCOW (Reuters) - BP (BP.L) is conducting secret, high-level negotiations with the Russia-connected billionaires who co-own its troubled Russian venture TNK-BP and an outline deal to settle their dispute may come in weeks, a source familiar with the matter told Reuters.

Lamar McKay, a top BP troubleshooter brought in to resolve a long-running row over strategy and management control at TNK-BP, held a five-hour meeting in London the week before last with Mikhail Fridman, the billionaire oligarch who calls the shots on the Russian side of the company, the source added.

"The initial idea was to negotiate a quick two-pager to cease hostilities but this has now turned into something more substantial around agreeing the principles of how to run the company," the source said, speaking on condition of anonymity.

"A deal is a few weeks away. They are likely to sign something."

The crisis at TNK-BP, which produces a quarter of BP's worldwide oil output, hit the headlines after BP accused the Russian side of using 1990s-style corporate raider tactics to grab control of the venture.

The Russians said their only interest was to improve management performance and boost shareholder value. But company insiders have suggested they may be acting in concert with Kremlin officials who want to see a state company taking a stake in TNK-BP, which made $5.3 billion (2.9 billion pounds) in net profit last year.

Top government officials have denied involvement, saying the dispute over TNK-BP is a matter for shareholders alone.

Stan Polovets, chief executive of the AAR consortium which groups the Russia-connected oligarchs, declined to discuss the talks. "We agreed not to comment on the negotiations and we feel it's really important to honour that agreement," he said.