The sordid TNK-BP partnership squabbles, which could someday be the stuff of a film, continue to worsen for London-based BP (NYSE: BP). For now, the issue has implications for oil and gas companies -- all Western companies, for that matter -- considering doing business in Russia, and for prospective shareholders of Russian companies.
In the adventure's latest act, James Owen, TNK-BP's independent CFO, began this week by stepping down from his post amid the worsening struggle between BP and its three Russian billionaire partners. Nearly two weeks ago, the Russian partners forced the partnership's CEO, Robert Dudley, to skedaddle from Russia. The trio had registered a string of progressively more severe complaints against Dudley, who is now trying to run things from Central Europe after Russian officials refused to renew his visa.
Dudley's long-distance efforts (which you have to believe won't be workable for long), along with Owen's departure, will make it easier for the Russian partners to gain control of TNK-BP. Indeed, I'm betting that BP will be squeezed out of the picture before long.
BP's difficulties in Russia follow the stripping of Royal Dutch Shell (NYSE: RDS-A) (NYSE: RDS-B) from its position as operator at Sakhalin Island a year and a half ago. Most of Shell's assets were sold under duress to Russia's giant natural gas company Gazprom (OTC BB: OGZPY.PK). That's a fate that could await at least some of the TNK-BP assets. And ExxonMobil (NYSE: XOM) also has found operating on Sakhalin less than a bed of roses, although it continues to ply its trade there.
All this has giant implications for BP and for other companies -- France's Total (NYSE: TOT) comes quickly to mind -- with an eye toward working more in Russia. In BP's case, its TNK-BP assets constitute about a fourth of its global production and almost a fifth of its reserves. While being forced to sell those assets, at whatever price, might not cripple the company, it'd nevertheless deal it a painful blow.
As for other companies and prospective investors, Dmitry Medvedev has now held Russia's presidency for about three months. In that time, the Russian state and its companies haven't given any indication that they're going to be better playmates than they were under Vladimir Putin, who now operates as Russia's prime minister. It's a dose of reality that all Foolish investors should take to heart.
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