18 June 2004 13:15
TNK-BP: AGREEMENT WITH AAR ON MODIFICATION OF BP PAYMENT SCHEDULE
The British petroleum group BP indicated on June 11 that it has reached agreement with the AAR holding, its Russian
partner within the TNK-BP joint venture, to amend the schedule for payment for its stake. Created in 2003 and
Russia's third oil company, TNK-BP is controlled jointly by BP and AAR, which brings together the Alfa Group and
Access-Renova, which previously owned 100% of TNK. The initial agreement provided for the payment of $3.75 billion in BP
shares in three $1.25n billion instalments on August 29, 2004, 2005 and 2006. The two parties have now reached agreement
on deferring this annual payment until September 20, according to a statement released by BP. The date of August 29 was
inconvenient to BP since it falls just after the date on which BP shares no longer give a right to a dividend for the
third quarter of the tax year. This "ex-dividend" period usually results in a fall in the value of the stocks
concerned, thereby leading to an incorrect calculation of the number of shares to be given to AAR to correspond to $1.25
billion. The Financial Times affirmed last months that TNK-BP's Russian partners had demanded payment by BP for its
share in one and not three instalments. A BP spokesman merely noted that the agreement concerns "payment in three
annual instalments" and that this agreement will be respected. BP and AAR finalised the creation of their Russian
joint venture in August, BP investing a total of $6.8 billion.
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