British oil giant BP has blocked a mammoth dividend payment due to Russian shareholders of a strife-torn joint venture, an English newspaper reported Sunday. The move is seen as leverage amid a bitter row over investment plans which has left the chief executive of joint venture TNK-BP, Robert Dudley, facing expulsion from Russia at the end of the month.
A spokesman for BP told AFP Sunday that the company could not comment on discussions held during a TNK-BP board meeting in Cyprus on July 11, after the Sunday Telegraph cited a company source as saying 1.8 billion dollars (1.1 billion euros) were being witheld.
The London spokesman said that the Russian shareholders "are known to be shareholders for cash whereas BP is an investor for development and growth."
According to the newspaper's source, BP is "playing hardball and hitting the Russians where it hurts." However, a spokesman for the company's Russian partners, the Alfa-Access-Renova (AAR) consortium, also told the paper its four shareholders had agreed to delay the payout.
Both parties have indicated their willingness to go to the courts in a bid to resolve the corporate stand-off. The dispute is seen as a test for Russia's foreign investment climate.
It is also a key challenge for BP as the joint venture accounts for around a quarter of the oil giant's global output and executives have warned the row is tearing the multi-billion dollar company apart.
Dudley maintains that under Russian law his contract, which officially ran out in December 2007, has been automatically extended. The Russian shareholders contend that this is not the case.