BP and the Bear Make Up

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Unexpected news like this makes it worthwhile to rise and shine each morning. After months of progressively heated squabbling and an expected breakup, it appears that the beleaguered TNK-BP partnership in Russia may be salvaged.

As most Fools know, the joint venture between BP (NYSE: BP) and a trio of Russian billionaires has become progressively more contentious, with CEO Robert Dudley being forced out of the country after Russian authorities refused to renew his work visa. Dudley has been running the company from an undisclosed location in Europe. In addition to his involuntary relocation, the partnership's CFO and its director of downstream activities have both recently jumped ship.

Until the good news broke, I wouldn't have given you a nickel for BP's ability to retain its stake in the unit. A complete loss of its interests -- even one involving some minimal (read: Russian-dictated) compensation -- would nevertheless have cost the British company about a quarter of its global production, and a fifth of its reserves.

But now the discord appears to have been at least patched up, if not totally repaired, under a new agreement between the quarreling factions. As part of the deal, BP will replace Dudley with a new Russian-speaking CEO, and float shares representing at least 20% of the company.

I suspect this surprise twist results from the damage Russia's reputation -- and its markets -- have sustained in the world community, given the TNK-BP debacle, the country's invasion of Georgia last month, and Prime Minister Vladimir Putin's rough approach toward Moscow-based metals company Mechel (NYSE: MTL). These recent events follow a virtual confiscation of Royal Dutch Shell's (NYSE: RDS-A) (NYSE: RDS-B) assets on Sakhalin Island, along with apparent efforts to test the nerve of ExxonMobil (NYSE: XOM), which also is operating under some duress on Sakhalin.

Losing the TNK-BP assets would have severely wounded BP, which may explain why it trades at a discount to the Big Oil likes of Chevron (NYSE: CVX). Now, with the company's fortunes apparently improving, interested Fools can jump in at twice the forward dividend yield of the second-largest U.S.-based integrated producer.