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TNK-BP Faces Dividend Criticism, Damage Claims on Pipeline Probe

TNK-BP may face damage claims for oil spills from Russia’s environmental watchdog as the Energy Ministry accused the venture, owned by BP Plc and a group of billionaires, of sacrificing pipeline maintenance for dividends.

TNK-BP, Russia’s third-largest oil producer, pays almost all its profit to its shareholders, Energy Minister Sergey Shmatko said today at a government meeting with Prime Minister Vladimir Putin. Regulators will seek damages from TNK-BP as one of the biggest polluters of the Ob and Yenisei river basins in Siberia, Natural Resources Minister Yuri Trutnev said at the meeting, which was attended by reporters.

Putin told Shmatko to talk with TNK-BP’s shareholders about pipeline upgrades and “use all instruments within the law.”

TNK-BP shares slumped 4.4 percent, the biggest decline in six months, closing at 90.83 rubles at 6:45 p.m. in Moscow. The oil producer’s press service declined to comment on the meeting.

The Natural Resources Ministry asked prosecutors yesterday to investigate TNK-BP for attempting to avoid government scrutiny by re-registering five units. TNK-BP has been targeted before by ministry regulators for underproduction at the Kovykta natural-gas field in eastern Siberia, which was eventually sold to state-run OAO Gazprom.

Prepare Claims

“I’ve ordered the Natural Resources Inspectorate to prepare damage claims and recommended the company prepare a plan for replacing its pipelines,” Trutnev told Putin. Each year, 300,000 metric tons to 500,000 tons of oil and products are leaked into the Ob and Yenisei river basins, he said.

TNK-BP paid out $7.9 billion of cash as dividends in 2011, according to a company presentation. The venture is owned 50-50 by BP and the AAR group of companies controlled by billionaires Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik.

“They have sufficient financial resources to triple investments and bring the infrastructure in order in five to seven years,” Trutnev said.

TNK-BP acted within the law with its re-registration of units, a press official said by e-mail today, declining to be identified in line with company policy. The venture began restructuring its exploration and production unit in 2008 to reduce the number of entities and enlarge key production units, he said.

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