Russian official reassures TNK-BP shareholders

Nataliya Vasilyeva, Associated Press

MOSCOW (AP) -- Russia's deputy prime minister said Thursday that Rosneft's CEO has assured him the interests of disgruntled minority shareholders in oil firm TNK-BP would be respected.

TNK-BP, Russia's third-largest oil company, was taken over by Rosneft last year. International investors holding some 5 percent in TNK-BP have seen the value of their shares halve since Rosneft agreed to buy the company from a group of Russian billionaires and British company BP. The minority shareholders have been left in limbo, with Rosneft showing no sign of wanting to take over the remaining shares and investors unable to find other buyers for their stakes.

Igor Shuvalov told reporters on Thursday that Rosneft's chief executive, Igor Sechin, had been in talks with the minority shareholders and assured him that the interests of investors "will be satisfied."

"I was happy with the assurances and explanations that he gave to me," Shuvalov said. He gave no further details of the talks with Sechin.

Shuvalov expressed confidence that it is in Rosneft and Sechin's interests to deal with the "bad feelings" of TNK-BP's shareholders.

Foreign investors have in recent months been citing the case of the TNK-BP investors as an example of bad corporate governance in Russia. TNK-BP's minority shareholders are eager to sell at the price that Rosneft paid the firm's Russian billionaire owners, but Sechin has rejected calls for a buy-out. In the meantime, Rosneft has approved plans to pull out billions of dollars from TNK-BP subsidiaries as loans.

Sechin earlier Thursday sent the share price of TNK-BP nearly 4 percent lower after saying Rosneft would be accountable for TNK-BP's dividend only from March 21, when it formally acquired the company. That raised concern that no dividend would be paid for the previous fiscal year.

Sechin also said TNK-BP shareholders should expect future dividend payments to be in line with those of Rosneft, which pays 25 percent of its profits in dividends. Before the takeover, TNK-BP would routinely funnel more than 70 percent of its profit into dividends.

Rosneft's shares were down 4.4 percent early Thursday evening in line with the market.