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The Business Online: Spurned Russia boss threatens to walk out on BP

By: Rupert Steiner, Associate Editor and Richard Orange
17/01/2007

ROBERT Dudley, the president of BP’s joint venture in Russia, privately warned that he would leave if passed over for the job of BP chief executive. In the event, the post went to Tony Hayward, BP’s head of exploration and production. Last week Hayward was appointed successor to John Browne, who will step down from his current position in June.

“He [Dudley] said he will leave,” said a senior source. “He has been passed over and I don’t think they will keep him. He is running the eighth largest oil company in the world for BP; he can probably go somewhere else and run an oil company himself now.”

If Dudley does in fact act on his threat to leave, it will be a severe blow to the oil giant. As the head of BP’s 50% owned TNK-BP he has been instrumental in providing the main source of growth for the entire business in the past few years.

In a tightly-fought race with Dudley that was much closer than has been previously disclosed, Hayward’s appointment was only decided after a number of tense board meetings. “It was very much neck and neck until the end,” said another source. “There was a real debate.”

BP might also lose some of the other internal candidates who had hoped to bag the chief executive role. Andrew Inglis, Hayward’s deputy, Iain Conn, responsible for safety, operations and human resources, and John Manzoni, chief executive of refining and marketing, had all been lined up for the position.

BP has been battered by a raft of problems during the past year, culminating with Tuesday’s devastating American report on its safety record; it can ill-afford an exodus of its senior managers.

Browne’s departure has not been smooth. The Business broke the story last summer that BP’s chairman, Sir Peter Sutherland, had forced Browne into setting the date that he was going to stand down. BP has a rigid retirement policy for executive directors, who must step down when they reach 60. Browne will now retire 18 months earlier than had been agreed.

“I think he [Browne] effectively felt he would be a lame duck,” said one source. “I think he just didn’t want to go down that road. It was a combination of Lord Browne and the board all realising he was quickly going to become a lame duck, so they figured out that he probably needed to go sooner and he said fine.

“I think it was sort of an intelligent decision. I think the view was not to put the company in another power struggle publicly again, as they have already done that once.”

Dudley came from BP’s Amoco acquisition in 1998. His role involves careful handling of the company’s relations with the Kremlin.

Bob Dudley told The Business: “I am supportive of BP’s appointment of Bob Hayward. I have no plans to leave and have made an open-ended long-term commitment to TNK-BP.”

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