OIL giant BP hammered out a deal with the oligarch co-owners of its Russian joint venture yesterday, ending many months of bitter wrangling and paving the way for a partial international flotation of TNK-BP.
The terms maintain BP's 50 per cent shareholding and include the appointment of three new independent directors – as the parties confirmed yesterday that they would also consider an international public listing for the joint venture.
Crucially, BP
has had to agree with Alfa Access-Renova, the oligarchs' consortium, to the replacement of TNK-BP chief executive Bob Dudley with the British company's choice of a Russian-speaking nominee with extensive Russian business experience. Dudley recently quit Russia, saying he had been subject to a campaign of sustained harassment.
UniCredit Aton analysts said in a note: "The key point of the potential resolution lies in the IPO (initial public offering] proposal, which could increase TNK-BP Holding's free float by 20 per cent, making it a substantially more liquid and therefore attractive company."
Tony Hayward, BP's chief executive, said the agreement was "a sensible means of resolving a situation that could not continue without causing serious damage to what has been an immensely successful joint venture for all concerned".
The UK oil major had accused its partners of orchestrating a campaign of state harassment against TNK-BP and its officers as a means of securing control of what is Russia's third-largest oil producer. The Soviet-born billionaire co-owners, led by Mikhail Fridman, made a counter-accusation that BP had run the joint venture like a subsidiary and Dudley had favoured the British shareholder.
BP and its partners said in separate statements yesterday that they had signed a memorandum of understanding that would be finalised in the coming months.
As the dispute in recent months grew increasingly shrill, TNK-BP management faced a host of lawsuits and Dudley fled Russia having failed to renew his visa. Hayward said: "We hope that the issues that TNK-BP has been dealing with will become less (frequent]."
Hayward added that two of the four billionaires who own half of the venture, Viktor Vekselberg and German Kahn, may lose their senior management roles at TNK-BP following the deal.
Dudley, who will leave by the end of the year, said in a statement from TNK-BP that the company would deliver its best-ever financial results this year despite the row.
TNK-BP's board, where each side has half the seats, will be restructured. In future, each side will appoint four directors, and the three independent directors will hold the balance.
PROFILETHE highest-profile casualty of yesterday's peace deal is the joint venture's chief executive Bob Dudley.
The BP man, who has been chief executive of TNK-BP since it was formed in August 2003, will step down before the end of the year.
Dudley quit Russia this summer after what he said was intimidation by the authorities, with analysts hard-pressed to remember the last time such a big business was run from outside its homeland.
BP chief executive Tony Hayward said Dudley was "an absolutely outstanding CEO of great courage and strength of character".
He added that Dudley had overseen an "extraordinary performance, financial and technical" that contributed $80 billion in taxes and duties to the Russian Federation.
BP wants Dudley to stay on at the British company in an unspecified senior position.
The full article contains 574 words and appears in The Scotsman newspaper.
