The Russian shareholders of TNK-BP say they want to swap their 50% stake in the corporation for shares in BP, reports Kommersant business daily. Such a deal would give the Russian faction (the AAR group) 7.6% of the British oil major. But the parties hav

The conflict between TNK-BP’s British and Russian owners has reportedly escalated into a corporate war and will almost certainly end up in court.

The deadline set for the resolution of the ongoing dispute was June 11.

Kommersant reports that one of the Russian shareholders, Leonard Blavatnik, has sent Tony Hayward, the BP Chief Executive, a letter proposing the share swap. Blavatnik suggested BP provide AAR with an option allowing the group to exchange its shares of the Russo-British company for shares in BP proper. The details of the deal were to be discussed later.

The market value of BP is about $US 215.5 billion. TNK-BP is worth $US 32.8 billion. Hence, 50% stake of the joint venture equals a 7.6% share of the British oil giant.

Another AAR representative, Viktor Vekselberg, has said BP has rejected the offer so the parties are not negotiating on the issue anymore.

Experts are inclined to think that the conflict will be resolved with the Russian side selling its stake in the firm. But prior to the deal, AAR will try to do their best to strengthen their position in the joint venture, where all the key seats are currently occupied with the British party’s appointees.

AAR says it wants to bring the agreement on the use of foreign labour at the TNK-BP before the Stockholm arbitration court, a body founded in 1917 to resolve international commercial disputes.

An official check to see whether the joint venture is complying with Russia’s labour and migration laws is due to end this week,  according to Yury Basov, the Presnensky District Prosecutor.

AAR owns half of TNK-BP. It consists of Alpha Group, Access and Renova and belongs to Russian tycoons Mikhail Fridman, Leonard Blavatnik and Viktor Vekselberg respectively.