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Outline deal close on TNK-BP shake-up

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Outline deal close on TNK-BP shake-up

By Carola Hoyos in London

Published: August 28 2008 03:00 | Last updated: August 28 2008 03:00

BP and its Russian partners in TNK-BP could have an outline agreement about how to restructure the management of the company by the time the Russian oil company’s board meets at the end of September, but a detailed accord is expected to take longer.

At stake, at the very least, is the management structure of the company and who will fill the position of Bob Dudley, TNK-BP chief executive, who last month fled Russia citing systematic harassment and has since been barred by a Moscow court from running the company.

The 50-50 structure of the partnership is expected to remain, though nothing is certain, people close to the discussions said. Mr Dudley has said the investigations and court decisions regarding BP’s labour practices have been part of the campaign of the Russian shareholders to gain more control of the company.

The Russian shareholders – oligarchs Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik, who are represented by the Alfa-Access-Renova group – have denied any connection to the inquiries and investigations targeting the group. AAR recently said: “AAR shareholders and senior Russian executives inside TNK-BP had repeatedly raised concerns with Robert Dudley and BP regarding the company’s failure to adhere to Russian laws, including labour regulations. But our warnings were not taken seriously. This court decision shows we were right to be worried.”

Tony Hayward, BP chief executive, several months ago called on Lamar McKay to return from his most recent posting in the US, to resolve the dispute.

Mr McKay, who has had several meetings with all sides of the Russian shareholders, is a trusted confidant of Mr Hayward and had previously represented BP on the board of TNK-BP.

BP said discussions had been going on for some time, but refused to comment on their content or progress.

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