BP's Q2 Profit Soars on High Oil Prices

MTDudley leaving an Interior Ministry office in Moscow on June 10. BP said Tuesday that he was in Central Europe.
BP posted a 61 percent rise in underlying second-quarter profit Tuesday thanks to high oil prices, beating analysts' estimates, and its share of second-quarter net income at Russian joint venture TNK-BP doubled to $1.35 billion.

BP also said its share in TNK-BP's net income rose to $2.1 billion in the first half, from $848 million year on year.

The other half of TNK-BP is owned by four Russian billionaires, grouped in consortium AAR, who are in a dispute with BP over strategy and management.

BP CEO Tony Hayward said Tuesday that the company would vigorously defend its rights at TNK-BP and that the dispute was not about government control.

The battle was only just starting, he said, adding: "We've only been at it six months ... We will see who is the weaker party in due course."

Hayward said TNK-BP CEO Robert Dudley was in Central Europe and that BP had no tax liability related to his location. He said it was possible to run the firm from abroad for months, not years.

AAR on Monday asked BP to disclose Dudley's location, saying his plan to run the company from abroad could have tax implications.

The Federal Migration Service said Tuesday that TNK-BP chief operating officer Tim Summers had received a work visa, Interfax reported. His visa, like Dudley's, expired Monday.

TNK-BP has not reported second-quarter results. Analysts view BP's reports of TNK-BP financials as an important guide, but TNK-BP says they are not necessarily the same as its own results.

BP said its share of TNK-BP's crude output fell to 825,000 barrels per day in the second quarter from 837,000 bpd in the same period of 2007.

Transparency International said Tuesday that it would include the TNK-BP dispute in its annual report on the transparency in the extraction industries, Interfax reported.

(Reuters, MT)