September 4, 2008

Oil Giant TNK-BP Settles in-House Feud

Russian and British stakeholders in TNK-BP have agreed to restructure leadership to settle claims the company was run with a foreign bias, the company said.

The deal includes replacing Chief Executive Officer Robert Dudley, a former BP executive, with an independent candidate who speaks Russian, The Wall Street Journal reported Thursday.

Russian investors and BP also agreed to trim the management board from 14 members to 11, including four representing AAR, the Russian investor group, four representing BP and three independent directors, the Journal reported.

The conflict between Russian and British interests led to a series of government regulator interventions, including a recent court decision to disqualify Dudley from his CEO position because of minor paperwork violations, the Journal reported.

Dudley had been forced to leave Russia in July and, for a time, had been running the company from an undisclosed location.

In the deal, BP will maintain ownership of 50 percent of the company, which accounts for a quarter of its oil production and a fifth of its reserves, the Journal reported.

While the deal looks to favor Russian interests, "The more of a Russian complexion this deal has the better," an undisclosed source told the Journal.