Robert Dudley, TNK-BP’s embattled chief executive, faced the prospect of a humiliating retreat from Russia yesterday as battle intensified over the future of the joint-venture company half-owned by BP, the British oil group.

The Federal Migration Service (FMS) in Moscow said that Mr Dudley no longer had a right to work in Russia until TNK-BP presented a valid employment contract in support of his application to renew his visa.

The controversy plays into the hands of four Russian billionaires who own half of TNK-BP. They have demanded Mr Dudley’s dismissal as part of a wider struggle with BP over the direction of the joint venture, Russia’s third-largest oil company.

The FMS has given Mr Dudley until Sunday to produce a contract before a temporary residence visa expires. His contract expired in December, but BP insists that it remains in force because it rolls over automatically under Russian law unless formally terminated.

Konstantin Poltoranin, an FMS spokesman, said: “We cannot grant a visa to Mr Dudley before he presents a valid contract. The previous contract expired and we have no proof that it has been prolonged. The current visa does not give him the right to work in Russia.”

The four billionaires – Mikhail Fridman, Viktor Vekselberg, German Khan and Len Blavatnik – argue that Mr Dudley’s contract is no longer valid because it has not been renewed officially. Mr Dudley has been TNK-BP’s chief executive since the company’s formation in 2003, but the Russians’ AAR consortium accuses him of acting solely in BP’s interests.

BP argues that the oligarchs would not be trying to dismiss Mr Dudley if they thought his contract no longer existed. It has insisted that he would continue to run TNK-BP from outside Russia if he is refused a visa.

A BP official said that Mr Dudley remained eligible to work in Russia under his present visa, adding: “Bob asked them three times [at a meeting last week] to clarify whether the visa allowed him to work and that was confirmed. There is no doubt in his mind.”

Mr Dudley has a valid work permit for Russia, but must show an employment contract to renew his residence visa, which expired on July 19. The FMS gave a temporary extension until July 27. Mr Poltoranin said: “We may extend his visa one more time, but without a valid contract he cannot work in Russia.”

Mr Dudley has said that the battle with TNK-BP’s Russian investors threatens to “tear the company apart”. Sixteen Russian staff of TNK-BP began a legal action last week, alleging that Mr Dudley had mismanaged the company and discriminated against them on ground of nationality.

BP has blocked a $1.8 billion (£900 million) dividend payout to its partners until a TNK-BP board meeting in September, citing “uncertainty” over the company’s future. The Russian shareholders have received nearly $18 billion in dividends to AAR since 2003.

BP has accused its Russian partners of corporate raiding in an attempt to seize control of the $38 billion company. AAR insists that it wants only to improve performance, arguing that BP is treating TNK-BP like a subsidiary.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax