BP's Hayward Meets Fridman in Prague

BP chief executive Tony Hayward and oligarch Mikhail Fridman held talks in Prague in an effort to resolve their escalating dispute over Russian-British joint venture TNK-BP, sources close to both sides said Thursday.

The meeting, held Wednesday in the Czech capital, did not represent a significant breakthrough in the dispute between BP and four Russian billionaires grouped in the AAR consortium, who are battling for strategic control of TNK-BP, Russia's third-largest oil producer, sources said.

TNK-BP declined to comment on whether its embattled chief executive, Robert Dudley, was in Prague.

Dudley left Russia last week, citing a campaign of "sustained harassment" that saw him targeted by labor inspectors and prosecutors, while migration authorities refused to renew his visa. Hayward told reporters in London on Tuesday that Dudley was currently in Central Europe.

"I think we're still in for a very long haul," one source inside TNK-BP said Thursday.

"There are so many things to work out," the source said, adding that a battle of "stalemate and attrition" lay ahead.

A BP spokesman in London declined to comment.

Even as the meeting raised the possibility of a compromise, TNK-BP was further targeted by labor authorities on Thursday and lost a court case in the Siberian city of Tyumen.

The Moscow labor inspectorate sent a request to Dudley's office, a copy of which was obtained by The Moscow Times, demanding a huge amount of information about several employees to be handed over by Aug. 4.

The Tyumen court on Thursday ruled that TNK-BP's management had illegally nominated directors to the board of TNK-BP Holding, an operational unit of the company that is 95 percent owned by TNK-BP with a 5 percent free float.

TNK-BP's management had nominated nine directors to the board of TNK-BP Holding and refused to allow certain nominees close to the Russian shareholders to withdraw their candidacy, argued Alexander Gorshkov, one of the nominees, who brought the lawsuit.

TNK-BP said it would appeal the decision.

BP and Dudley have faced a slew of regulatory pressures in their protracted battle with AAR over the development of TNK-BP.

The TNK-BP saga has helped push Russia's markets downward, as investors appear increasingly weary of the risk of investing in the country following the government's singling out of coal miner Mechel, as well as a drop in oil prices.