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BP-TNK partners are back on speaking terms

BP-TNK partners are back on speaking terms

By Russell Hotten Industry Editor
Last Updated: 11:40pm BST 11/07/2008

BP and its billionaire partners in their Russian oil joint venture put the bad-mouthing on hold, with both sides describing a meeting to resolve differences as “polite and cordial.”

The two sides have been in a bitter fight for control of TNK-BP, Russia’s third largest oil producer, with the four billionaires demanding the removal of the venture’s chief executive, Robert Dudley.

A TNK-BP board meeting in Cyprus broke up without agreement on the main issues, but the mere fact that the two camps were sitting at a negotiating table was seen as progress. A previous scheduled meeting was abandoned when the Russians did not turn up.

Asked about the chances of a compromise, Viktor Vekselberg, who with Russian co-investors owns 50pc of TNK-BP, said: “There is always hope. I have been and remain optimistic, and I’m sure we’ll reach a compromise. Until we get an agreement, we will take all legitimate steps to protect our interests.”

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BP described the meeting as “sensible”, but held firm on demands that Mr Dudley be sacked. “We fully support Bob Dudley. He’s done a great job in terms of increasing production” and “also in terms of return to shareholders,” said a BP spokesman yesterday. Mr Dudley survived a vote last Monday to dismiss him as head of the company’s management subsidiary, known as TNK-BP Management, during a meeting of that unit’s board.

The Russian investors, operating under consortium called Alfa-Access-Renova (AAR), say TNK-BP’s financial performance has been poor and that Mr Dudley, a former BP employee, favours the UK company’s interests at the expense of other shareholders. This has been denied by BP.

Stan Polovets, chief executive of AAR and a vocal critic of BP, has been appointed to the TNK-BP board. He replaces Jean-Luc Vermeulen who quit in May out of frustration at the boardroom in-fighting.

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