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TNK-BP Russian shareholders scupper meeting


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TNK-BP Russian shareholders scupper meeting

By Catherine Belton in Moscow

Published: May 30 2008 03:00 | Last updated: May 30 2008 03:00

Crucial talks between BP and its Russian partners in TNK-BP, the Russian oil venture, broke down as the Russian billionaire shareholders failed to attend a scheduled board meeting in Cyprus amid a stand-off for control of the company, two people familiar with the situation said.

Tony Hayward, BP’s chief executive, flew to Cyprus for talks with TNK-BP’s Russian shareholders, Mikhail Fridman, Viktor Vekselberg and Len Blavatnik, on the sidelines of the planned TNK-BP board meeting.

TNK-BP accounts for a quarter of BP’s production and 13 percent of its profits.

BP had sought to reconcile differences as tension mounts over control of the company ahead of an expected sale by TNK-BP’s Russian shareholders of their 50 per cent stake to a state-controlled energy company, which could be either Rosneft or Gazprom. A potential broader tie-up between BP and Gazprom is also being considered.

But informal talks broke down yesterday after the Russian shareholders raised the issue of removing Robert Dudley, the venture’s BP-backed chief executive.

After that proposal was made, the board meeting did not take place, a person familiar with the situation said.

BP declined to comment on details of the talks with the billionaires, who form the AlfaAccessRenova consortium, but this week threw its public backing behind Mr Dudley after AAR censured him for speaking out.

The company said: “BP and AAR shareholders met today to discuss future strategy and direction of the company and these talks will continue. However, today’s TNK-BP board meeting did not convene because . . . the AAR directors chose not to attend.” None of the representatives of AAR could be reached for comment.

The friction became public this week as the two sides traded public barbs about investment strategy and the role of foreign specialists.

Several people familiar with the situation think the stand-off was sparked by one Russian shareholder seeking to ensure he was in the driving seat for negotiations on a TNK-BP stake sale. “This is all about control and money,” one of the people said.

BP’s role in TNK-BP has come under scrutiny after its Moscow offices were raided twice in two months, while foreign specialists from BP have been barred from working at the company.

A Siberian court issued a temporary injunction against them appearing for work after a minority shareholder filed suit. The executives of Tetlis, the minority shareholder, were previously employed by Mr Fridman’s Alfa Group, which has denied any links with the lawsuit.

The role of TNK-BP senior managers from BP, including Mr Dudley, could also be in jeopardy after a Russian senior manager filed for fewer work permits.

In the Vedomosti newspaper this week, Mr Dudley accused the manager of an erroneous filing and acting in the interests of one Russian shareholder. He did not name the shareholder or manager.

Roland Nash, chief strategist at Moscow’s Renaissance Capital investment bank, said: “There is a huge amount of value at stake if [Mr Fridman’s] Alfa Group can position itself as a powerbroker between the state and BP.” and its sister non-profit websites,,,,,, and are owned by John Donovan. There is also a Wikipedia feature.

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