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TNK-BP partners to meet as Bob Dudley is banned

Times Online
August 15, 2008

TNK-BP partners to meet as Bob Dudley is banned

BP and its Russian co-owners in TNK-BP plan to meet next month in an effort to resolve their feud over the group’s management and to consider a partial flotation.

News of the extraordinary meeting, to be held on September 25, emerged as BP was dealt a fresh blow in its attempt to maintain control of TNK-BP after a Moscow court banned Bob Dudley, the joint venture’s chief executive, from working in Russia for two years.

The ban, which followed claims that Mr Dudley had breached Russian labour laws, was described by BP as evidence of a continuing campaign of harassment by TNK-BP’s Russian co-owners, designed to help them to win control of the company, which is Russia’s third-biggest producer of crude oil.

BP said it was very disappointed with this decision and added that it would seek to overturn it. “We believe this is clearly a further example of administrative activity orchestrated by the other shareholders in TNK-BP,” the company said, adding that Mr Dudley remained chief executive pending an appeal.

BP also said that Mr Dudley, who fled Moscow last month after problems with his work visa and a string of raids on TNK-BP’s offices, continued to have its full support. However, if the appeal fails, the ban on Mr Dudley working in Russia will effectively terminate his leadership.

He remains at an undisclosed location outside Russia from where he is running the company remotely, but Tony Hayward, BP’s chief executive, has admitted that Mr Dudley can maintain control from outside Russia for no longer than a few months.

TNK-BP, a joint venture with the AAR consortium of four Soviet-born billionaires, has been torn apart by a feud over ownership.

It emerged yesterday that AAR is seeking to modify the shareholding structure of complex holding companies related to TNK-BP. Analysts said this could be a prelude to widening the shareholder base of TNK-BP itself. Options could include a partial flotation.

AAR wants to dislodge Mr Dudley, an American former BP employee, accusing him of favouring BP and of poor financial performance. BP has rejected the claims, accusing AAR of the kind of “corporate raiding” commonplace in Russia in the 1990s.In particular, BP has rejected AAR’s insistence on a management shake-up at TNK-BP that would include the departure of Mr Dudley.

BP is understood to be prepared to consider some management changes but only as part of a package of measures, possibly including the departure of Viktor Vekselberg and German Khan — two of the AAR oligarchs who retain executive roles at TNK-BP.

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4535184.ece

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