U.K. oil giant BP PLC has proposed that its Russian joint venture TNK-BP pays shareholders a $1 billion interim dividend, TNK-BP said in a statement.
The idea was mooted Friday at TNK-BP's first board meeting in over half a year. Directors representing BP's Russian joint venture partners, the Alfa Access Renova consortium, said they would study BP's proposal and decide on the payout in the next week.
Regular dividends were suspended in May because of the shareholders' failure to agree on a new set of independent directors.
Without sufficient quorum, TNK-BP's board can't approve quarterly dividends. As a result, BP is expected to miss about $430 million of earnings from TNK-BP when it reports its first-half results on July 31.
The proposed dividend would net BP $500 million as a 50% shareholder.
Friday's meeting came amid renewed speculation over BP's future participation in TNK-BP, Russia's third-largest oil company. BP announced last month that it was considering selling its stake in TNK-BP after receiving expressions of interest from unnamed prospective buyers.
Although a lucrative investment--the joint venture has paid BP some $19 billion in dividends since 2003--the often-fractious relationship between its two sets of owners has also been a source of frustration for the U.K. firm. Relations worsened last year after AAR blocked BP's attempts to strike an independent deal with state-owned oil champion OAO Rosneft.
Legal processes stemming from the dispute continued to endure, prompting the resignation of two of TNK-BP's three independent directors in December.
Lacking its full complement of directors, TNK-BP's board can only rule on a limited number of issues, mainly related to operations. Aside from approving regular dividends, it is also unable to make management board appointments and can't decide on investments above $100 million in value.
In addition to BP's dividend proposal, the board heard a presentation by TNK-BP's management for the firm to invest up to $3 billion developing two vast gas fields in western Siberia through its Rospan subsidiary, according to people familiar with the matter.
Copyright (c) 2012 Dow Jones & Company, Inc.
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