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Tuesday, January 20, 2009

BP ties up TNK-BP deal

9 January 20098 - Upstream OnLine - UK supermajor BP said it reached a final settlement with Alfa Access-Renova (AAR), its joint-venture partner in Russia's TNK-BP, giving the Russian side even more influence than the preliminary deal envisaged. BP spokesman Toby Odone said that under the deal, German Khan and Viktor Vekselberg, two of the four billionaires that form the AAR consortium which owns 50% of TNK-BP, will keep their management board roles. When BP reached a preliminary settlement with AAR in September, BP boss Tony Hayward said one or both of the men, who BP sources blamed for stoking hostilities between the partners, would likely leave the company. "It's reasonable to expect that one or both of them will leave their positions," Hayward told Reuters in an interview at the time. Hayward also said the appointment of the management team would be decided by the new chief executive of TNK-BP. BP-appointed Bob Dudley agreed to step down as chief executive as part of the peace deal. However, Khan and Vekselberg's positions are being confirmed before a new chief executive has been appointed. TNK-BP's chief operating officer Tim Summers is currently acting chief executive. BP said it retains the right to nominate TNK-BP's chief executive and chief operating officer under the deal, although these positions must be approved by TNK-BP's board of directors. Also, AAR's insistence that the chief executive should have substantial experience of working in Russia and Russian language proficiency was conceded in September. Odone denied today's deal included significant new concessions. "If you look at the management board, it's pretty balanced," Odone said. TNK-BP's management board is also being slimmed down under the agreement, to six members, including Khan and Vekselberg, from 13 members under Dudley. Odone said a new TNK-BP chief executive would be announced "in due course".

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