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Last Updated: Monday, 11 April, 2005, 14:58 GMT 15:58 UK
TNK-BP gets $936m Russia tax bill
BP logo outside petrol station
BP's tax payments and profits have been on the increase
TNK-BP, the Russian oil firm 50%-owned by BP, has been hit with a 26bn rouble (495m; $936m) demand for back taxes.

Viktor Vekselberg, a member of TNK-BP's board, said that the firm would take legal action if it failed to find a compromise with Russian officials.

It is not the first oil firm to face demands for unpaid taxes and last year producer Yukos was broken up after being hit with a bill for $27.5bn.

TNK-BP has always claimed to have good relations with the Russian government.

Big squeeze?

News of the tax hike - which is for 2001, before the merger between TNK and BP - came on Monday at a major Russian investment conference in London on Monday.

We are going to hold talks with authorities
Viktor Vekselberg, TNK-BP board member

On the same day, Vladimir Putin, Russia's president was in Germany seeking to raise inward investment.

Under his guidance, Russia has tightened its control and oversight of many of the country's key industries.

Analysts said that there may now be further tax claims against large companies.

Many investors are still nervous following the problems that have dogged Yukos, and Russian shares fell after the size of the tax demand became apparent.

A Russian court is expected to hear the case against TNK-BP later this month.

'Hold talks'

Speaking at the Russian-investment conference on Monday, Mr Vekselberg questioned the size of the claim.

"We can't have back tax bills of such a size for this period," he told reporters.

"We are going to hold talks with authorities", he said, but he warned that if no compromise could be found "we will go to the courts".

The firm already has agreed to pay $10bn in Russian taxes this year, compared with $6.5bn in 2004.

TNK-BP produces almost a quarter of BP's daily output.


SEE ALSO:
Bumper oil prices lift BP profits
08 Feb 05 |  Business
BP fined over offshore gas leak
16 Nov 04 |  Scotland
Profitable times for BP
27 Apr 04 |  Business


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