The agency also affirmed the company's short-term rating at 'B'.
"The rating action reflects the possibility of a maximum one-notch upgrade in the coming months," S&P said.
"Any upgrade will depend on the group's sustained ability to deal with Russian operational risks," Standard & Poor's credit analyst Karl Nietvelt said.
These include the handling of remaining 2002 and 2003 back tax claims, which should be manageable given TNK-BP's current very strong financial position, S&P said.
"We will also seek further confirmation on the group's continued ability to extend existing licenses and successfully bid for new ones, and develop new projects, including gas," Nietvelt said.
S&P said, "Notwithstanding TNK-BP's current very high financial flexibility, we will also monitor future financial policy targets and debt management."
"The ratings on TNK-BP reflect its position as Russia's second-largest vertically integrated oil major. A high share of dollar-denominated crude and product export revenues, strong profitability, free cash flow generation, and a prudent financial profile underpin TNK-BP's credit quality. The ratings do not factor in any direct financial support from 50% owner BP PLC (AA+/Stable/A-1+), but acknowledge BP's management control and operational support. Key constraining factors are Russian oil-industry-specific and political-interference risks, notably for private and foreign operators, given that oil and gas transportation assets are controlled by state-owned entities and competition for reserves, with state-owned OJSC Oil Company Rosneft (B+/Positive/--) and OAO Gazprom (BB+/Positive/--), has increased," the agency said.
Standard & Poor's expects to resolve the CreditWatch status by the end of June after meeting with TNK-BP's management.
