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. Last Updated: 07/27/2016

BP Ordered to Pay $3.1Bln in Damages

VedomostiThe damages were awarded to a minority shareholder in TNK-BP who alleges that BP failed to inform TNK-BP's board about a $16 billion deal with state-owned Rosneft in 2011.

A Tyumen region arbitration court ordered BP to pay $3.1 billion in damages Friday as part of litigation that the international oil major said amounts to corporate blackmail.

The damages were awarded to Andrei Prokhorov, a minority shareholder in TNK-BP who alleges that BP failed to inform the TNK-BP board about a $16 billion deal with state-owned Rosneft last year in contravention of the company's shareholder agreement. The deal later collapsed.

Prokhorov had originally sought $13.6 billion from BP, but the Siberian court said BP must pay out $3.1 billion, Interfax reported. BP said that it would appeal against the decision.

Another case brought by Prokhorov and a group of minority shareholders against two TNK-BP directors was thrown out in January.

"The lawsuit was based on absurd assumptions and has nothing to do with the interests of TNK-BP and its shareholders," said Konstantin Lukoyanov, BP's Russian lawyer, Interfax reported. "It's obvious that TNK-BP did not incur and could not incur any losses. … We consider this lawsuit to be an attempt at corporate blackmail and are convinced that today's decision should be canceled."

The court decision comes three days after state-owned oil giant Rosneft announced that it was entering into negotiations with BP to buy its 50 percent stake in TNK-BP, which has an estimated price tag of $20 billion.

The decision of Rosneft, Russia's biggest oil company, to look at taking a stake in TNK-BP appeared to put the only other bidder, AAR Consortium, the investment vehicle of BP's billionaire partners in TNK-BP, on the back foot.

Some experts have suggested that AAR is using minority shareholders in TNK-BP to exert pressure on BP in the wake of its failed tie-up with Rosneft. AAR denies the claims.