Moscow (Platts)--13Nov2012/845 am EST/1345 GMT

BP and its Russian partner in the TNK-BP oil producer, AAR group, Tuesday said they have agreed to settle all outstanding disputes between the shareholders, in a move aimed at paving the way for the planned sale of the oil venture to Rosneft.

The comprehensive agreement ends all current arbitration proceedings between the parties over claimed damages from BP's failed Russian exploration deal with Rosneft in 2011, the two said in separate statements.

The deal includes a waiver, effective immediately, of a provision in the original TNK-BP shareholder agreement which restricted each of the partners from pursuing new opportunities inside Russia, they said.

As a result, both BP and AAR are free to pursue new partnerships in Russia and the Ukraine, effective immediately, they said.

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"The parties have agreed to work constructively together with each other and with Rosneft to progress their respective disposals of their shareholdings in TNK-BP," BP said in its statement.

"This agreement is a win-win for both parties," AAR's CEO Stan Polovets said in a separate statement. "The settlement enables BP and AAR to focus on issues that are most important at this stage -- closing our respective transactions with Rosneft and ensuring that TNK-BP continues to operate at world class levels during the transition period that lies ahead," he said.

Last month, Russia's state-run Rosneft agreed deals to purchase BP's and AAR's 50% stakes in TNK-BP, after BP in June announced its plan to quit the oil venture, following long-running disputes with the Russian shareholders over the company's management and control.

AAR blocked a strategic Arctic upstream partnership deal in early 2011 between BP and Rosneft in the international courts, claiming that BP should only pursue any new opportunities in Russia through TNK-BP.

As part of the deal to exit troubled TNK-BP, Rosneft agreed to buy TNK-BP for some $54 billion in separate deals with BP and AAR.

Last week, BP and AAR said they reached an agreement to resume "the normal functioning" of the board of TNK-BP.

The TNK-BP board had been inquorate since December, when independent directors James Leng and Gerhard Schroeder stepped down.

--Robert Perkins, robert_perkins@platts.com
--Nadia Rodova, nadia_rodova@platts.com
--Edited by Richard Rubin, richard_rubin@platts.com

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