TNK-BP Board Approves Plan For $4.4Bln Capex, Dividend

MTDudley, Vekselberg and Fridman. Thursday's board resolved some key issues.
TNK-BP approved capital spending of $4.4 billion for 2008 after its board met on Thursday for the first time since a dispute over the running of the company was resolved.

The joint venture between BP and four Russian billionaires also agreed to pay a first-half dividend of 40 percent of net income, chief operating officer Tim Summers said after a "constructive" meeting in Antibes, in southern France.

BP and AAR, comprising Russian investors Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, settled a long-running standoff at TNK-BP earlier this month and pledged to revive output growth.

"There was strong support from the shareholders on investments from both sides," Summers said. "We've agreed on the capital program, which was an issue earlier in the year."

AAR had demanded that the company trim $900 million of planned capital spending to $3.5 billion to cut costs.

TNK-BP plans to invest an extra $2.5 billion in four Russian projects, mostly in 2009 and 2010, Summers said. The board did not discuss projects outside Russia, he said. AAR had previously pushed for TNK-BP to expand internationally.

The board approved a first-half dividend of about $1.9 billion, Summers said. Net income soared to a record $4.7 billion in the period on sales of $28.3 billion, he said.

Summers said he would take on the role of acting CEO from Dec. 1 if a replacement has not been found for Robert Dudley by then.