RusEnergy

4 Septermber 2008 - Russia Today - Shares of TNK-BP, a Russian joint venture of British Petroleum, jumped 13 percent on Thursday on the news that the company reached a deal, ending an ongoing dispute. The agreement between shareholders will see CEO Robert Dudley leave TNK-BP as 3 independent directors join the board. In the longer term an IPO of up to 20% of the company will follow. A long-awaited compromise. Russian and British shareholders of TNK-BP signed a memorandum of understanding, setting aside their differences. In a statement, TNK-BP's Chief Executive Robert Dudley said “Resolving the conflict will allow the company to reach a new level of independence and, eventually, open the way for the company to offer its shares to the public.” Under the agreement, Dudley will step down by the year's end. As for the IPO, experts say it will take place no sooner than late next year, if market conditions allow. Denis Borisov of Solid Investment says the settlement couldn't come at a better time as it could reassure foreign investors. “It clearly shows that shareholder conflicts in Russia, including those that involve foreign owners, can be resolved to mutual satisfaction. It's am important signal to the Western investment community.” Announcing the deal, BP chairman Peter Sutherland said it would also benefit the Russian state - through investment and technology. Analysts say it's not yet clear how TNK-BP will align its interests with the state - but its development strategy is likely to change according to Vitaly Ermakov, Director of Research at Cambridge Energy Research. “The Russian state, prefers to stay above the fray by and large, and the same thing happened to Gazprom. Gazprom basically decided to wait and see what is going to happen, and having said that, its quite clear that TNK-BP which faces the problem of mature assets and needs, desperately needs to move on to new acreage will try to find some ways of partnering with either Rosneft or Gazprom, basically to have access to new licences in Russia.” A Russian joint venture of British Petroleum, TNK-BP accounts for almost a quarter of BP's global output and reserves.