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. Last Updated: 07/27/2016

BP Paying $325M to End TNK-BP Dispute

VedomostiWhile highly lucrative for both sides, the relationship between BP and AAR has been plagued by disputes since the establishment of TNK-BP in 2004.

The AAR consortium agreed with international oil major BP onTuesday toend all legal disputes as thejoint shareholders inTNK-BP smooth theway towards ceasing their ownership role inthe company.

BP andAAR are both due toquit TNK-BP, Russia's third-largest oil producer, after being bought out bystate-owned Rosneft fora total of$61 billion inthe biggest deal inthe country's corporate history.

BP made apayment of $325 million toAAR toendlitigation still pending in a Stockholm arbitration court andease theprocess ofclosing its transaction with Rosneft, Interfax reported Tuesday citing anonymous sources.

In a joint emailed statement thetwo principal owners ofTNK-BP announced a"comprehensive agreement tosettle all outstanding disputes between them, including thecurrent arbitrations brought byeach against theother."

"The parties have agreed towork constructively together with each other andwith Rosneft toprogress their respective disposals oftheir shareholdings inTNK-BP," thestatement said.

While highly lucrative forboth sides, therelationship between BP andAAR has been plagued bydisputes since theestablishment ofTNK-BP in2004. Anadir inthe relationship between thepartners was reached inearly 2011 as AAR successfully turned toan arbitration court toblock a$16 billion Arctic exploration deal BP had concluded with Rosneft.

The agreement announced Tuesday also allows both BP and AAR to take part in energy projects outside TNK-BP.

“The agreement includes an immediate waiver of the new opportunities provision in the TNK-BP shareholder agreement, allowing each party to explore new opportunities and partnerships in Russia and the Ukraine, effective immediately,” said the statement.

Rosneft shares, which have surged this year under its new chief executive Igor Sechin, aKremlin heavyweight, reacted positively tothe news that thetakeover ofTNK-BP appeared tobe progressing without any hitches.

Thestate oil giant's shares were down 0.61 percent Tuesday.

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