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TNK-BP Picks BP Competitor

TNK-BP, whose logo is pictured on a hardhat above, will distribute Valvoline products to the passenger-car market for five years. Dmitry Abramov

In a snub to BP, its Russian joint venture TNK-BP on Wednesday agreed to distribute Valvoline motor oil.

Valvoline, an American brand, competes globally with BP's own motor oil brand, Castrol, which the British oil producer sells in Russia through a handful of distributors.

The Valvoline deal comes after a recent bout of contention — and litigation — between BP and its 50-50 partners in TNK-BP, a group of Russian and Russian-born businessmen.

"It does show that TNK-BP is indeed an independent company … and makes its own business decisions," Robert Wine, a BP press officer in London, said about the choice of the motor oil producer. "As shareholders, BP is fully in support of TNK-BP's decision in this case."

BP entered a partnership with Rosneft last year to develop Arctic fields only to see it collapse amid legal wrangling with the four billionaire co-owners of the country's third-largest oil producer TNK-BP, who argued that BP shouldn't have sidelined the joint venture.

Under the Valvoline agreement, TNK-BP, which has access to 15,000 retail stores and runs a network of 1,388 gas stations in Russia, will distribute Valvoline products to the passenger-car market for five years.

Russia is Europe's largest market for passenger-car lubricants, said Sam Mitchell, president of Ashland Consumer Markets, which owns the Valvoline brand. Demand is expanding, given the increasing popularity of Western cars, he added in a statement.

"TNK-BP offers unparalleled opportunities to introduce Russian drivers" to Valvoline premium products, he said.

TNK-BP welcomed the agreement as the "beginning of a productive relationship" between the companies.

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