A long-running dispute between BP and the partners in its Russian joint-venture TNK-BP appeared to have been resolved today.
A long-running dispute between BP and the partners in its Russian joint-venture TNK-BP appeared to have been resolved today.
BP and the oligarch shareholders have reached agreement over a new corporate structure for the company, which will see Robert Dudley, the BP-appointed chief executive, replaced with a Russian-speaking executive by the end of the year.
The terms, which are due to be finalised in the coming months, also maintain BP's 50% shareholding and include the appointment of three new independent directors. The parties will also investigate the merits of an international listing for the firm.
TNK-BP was formed in 2003 and has grown to become one of Russia's largest oil companies, contributing around a quarter of BP's profits. The oil giant's partners include oligarch Mikhail Fridman, who own their shares through the AAR investment consortium.
The two sides have been locked in a bitter dispute over the firm for several months, during which Mr Dudley has been banned from working in Russia for two years and BP has pulled staff out en-masse. There have also been angry accusations from BP chairman Peter Sutherland about AAR trying to wrest control of the venture, and manipulation of the Russian state over the matter.
BP chief executive Tony Hayward described the agreement as "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."
He added: "I now look forward to a fruitful conclusion of negotiations so that we can rebuild trust with AAR and resume our record of success for the benefit of all parties."
TNK-BP's chairman Mikhail Fridman, who previously called for Mr Dudley's resignation, said: "By agreeing to enhance the system of corporate governance of TNK-BP and enabling the company to compete on the international stage, we are beginning an exciting new chapter in the development of a great company."
BP shares rallied more than 3% in the wake of the announcement.
The agreement will also see TNK-BP's board change from 10 directors, five each from BP and AAR, to 11, made up of four from BP, four from AAR and the three new independent directors.
TNK's first half profits this year were 4.7 billion US dollars (£2.6bn), on revenues of 28.3 billion dollars (£15.9bn). The venture's oil production currently stands at 1.63 million barrels a day.
Mr Hayward paid tribute to Mr Dudley, who left Moscow in August, describing him as "an absolutely outstanding chief executive of great strength and strength of character".
"He will be very hard to replace," Mr Hayward added.
AAR comprises the firms Alfa Group, Access Industries and Renova Group. As well as Mr Fridman, who chairs Alfa. The other main controlling shareholders are Alfa's oil boss German Khan, Viktor Vekselberg, who heads up Renova, and Access founder Len Blavatnik.
The agreement with BP also drew comment from the Russian Government, currently under fire internationally over the conflict with neighbouring state Georgia.
Deputy Prime Minister Igor Sechin said in a statement: "This is a positive signal for the Russian market. We support the development of TNK-BP and believe that this company has excellent long-term prospects."
