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BP backs CEO over Russian oil venture row

 

BP backs CEO over Russian oil venture row

By Jonathan Russell

Last Updated: 1:33am BST 28/05/2008

BP has thrown its weight behind the chief executive of its troubled Russian joint venture TNK-BP following disagreements with Russian shareholders.

The dispute between TNK-BP chief executive Robert Dudley and Russian shareholders Viktor Vekselberg, Mikhail Fridman and Len Blavatnik centres around comments Mr Dudley made to a Russian newspaper over the weekend where he admitted the parties had disagreed over strategy, including the sale of Russian investments and expansion abroad.

The Russian shareholders are understood to be looking for rapid overseas expansion including markets where BP already has a presence. Although Mr Dudley has said he is not adverse to expansion into low risk countries it is thought he does not support higher risk countries such as those in the Middle East

The disagreement over expansion led to reports in Russian newspapers that Mr Dudley could be replaced as chief executive.

However a spokesman for BP said: “BP fully supports Bob Dudley’s position as president and CEO of TNK-BP. Mr Dudley is a highly experienced and outstanding industry executive who has consistently managed the business in the interests of all its shareholders and BP has absolute confidence in him.”

Prior to the current row two of the three Russian billionaire shareholders, Viktor Vekselberg and Mikhail Fridman are understood to have complained about Mr Dudley to BP chief executive Tony Hayward. Reports of the meeting mentioned calls for Mr Dudley to be replaced by Mr Vekselberg. The demand was rejected by Mr Hayward.

Russian deputy prime minister Igor Sechin also waded into the dispute yesterday advising the shareholders to solve their differences themselves. He said it would not be appropriate for the Russian government to take an official position.

Despite the statement it is widely believed that the Russian government wants to take control of at least part of the TNK-BP operation by merging it with one of the big Russian national oil companies.

TNK-BP was recently forced to give up a major Siberian gas project to Russian state gas company Gazprom and has been raided by Russian security services, signs, according to industry experts, of pressure being brought to bear by the Russian government. All shareholders have stated publicly they do not want to sell down their share in the joint venture.

TNK-BP, Russia’s third-largest oil company, produces nearly 2m barrels of oil a day, almost half BP’s entire global output.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/28/cnbp128.xml

 

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