LONDON (CNNfn) - BP Amoco is nearing a deal with Russia's fifth largest oil firm, Tyumen Oil, that could help the U.K. petroleum giant recoup part of a $484 million investment and reassure other western investors about the safety of doing business in a post-Communist Russia, according to published reports.|
Under a compromise achieved after BP Amoco reportedly appealed directly to Russia's prime minister, Vladimir Putin, the British company will cooperate with Tyumen and Sidanko - a holding company in which BP owns a 10 percent stake - to jointly develop the vast Samotlor oil field in Siberia, the Financial Times reported Wednesday.
The compromise offers a possible way for BP Amoco to save face in Russia after Tyumen, or TNK, last month snatched up one of Sidanko's prized oilfield assets from under the nose of the U.K. company.
Tyumen's grab for Sidanko's lucrative Chernogorneft production company, at a bankruptcy auction last month, was lambasted by BP Amoco as a legally dubious move that threatened to further sour Russia's image with western investors.
Tyumen is jointly owned by Russian companies Alfa Group and Renova, which control 51 percent of the firm, with the remainder belonging to the Russian government.
Under a proposed agreement, owners of Tyumen would cooperate with BP Amoco as a shareholder of Sidanko, returning Chernogorneft to Sidanko and then working together to develop the Siberian oil field.
Tyumen's shareholders would acquire 25 percent plus one share of Sidanko via an issue of new shares, the Wall Street Journal reported. At the same time, BP Amoco's voting rights in Sidanko would increase from 20 to 25 percent, to match Tyumen's stake.
A source familiar with the deal told Reuters news agency that BP would sign an agreement with Interros and Kantupan Holdings, which own major stakes in Sidanko, as well as with Alfa and Access/Renova, the two non-government investors in Tyumen.
Despite the deal, Tyumen is still not assured of securing an eagerly-awaited $500 million loan guarantee from the U.S. Export-Import Bank.
BP Amoco, the FT said, appealed to Russian Prime Minister Putin to intervene on its behalf in the dispute and also mounted an aggressive lobbying campaign in both the U.S. and Russia against the proposed Ex-Im Bank loan.
The Clinton administration has reportedly opposed the loan extension due to concerns over the outcome of the Tyumen-BP Amoco dispute, which highlighted the pitfalls for western companies doing business in Russia's emerging capitalist economy.
The war in Chechnya, marked by Russia's often brutal aerial bombing of the Chechen capital of Grozny, has injected an added measure of caution into any decision about the loan.
The Sidanko predicament at the heart of the dispute comes on the heels of Russia's financial crisis in August 1998, when the government canceled debt repayments overnight and effectively devalued the ruble, unleashing mass panic.
Since then the country has undergone a fragile recovery, with hopes for further economic reform boosted by the strong showing of two centrist political blocs in last Sunday's parliamentary elections.
In a separate development, billionaire Kenneth Dart, an international portfolio investor with major holdings in Russia, brokered an agreement with Russia's third-largest oil firm, Yukos. Under the pact, Yukos will buy Dart's interests in its production units by the end of the year, Reuters reported.
BP Amoco shares fell just over 1 percent at 620 pence in London Wednesday morning.
--from staff and wire reports