BP poised to settle TNK dispute
By Carola Hoyos in London
Published: September 4 2008 02:21 | Last updated: September 4 2008 02:21
BP is on Thursday expected to sign an agreement aimed at preserving its 50 per cent stake in TNK-BP – Russias third-largest oil company – after a power struggle with its local partners that focused attention on the rights of foreign investors in Russia.
The memorandum of understanding, agreed this week by BPs board, follows a long-running dispute over BPs most important international venture. It supplies 25 per cent of the companys oil and gas production.
The outline agreement, steered by Tony Hayward, BPs chief executive, and chairman Peter Sutherland, was reached after fears that BPs interest in TNK-BP could be at risk because of its fight with its Russian oligarch partners. BPs control of TNK-BP had also come under pressure from multiple investigations by the Russian authorities into its labour practices.
Under the deal, the 50-50 equity split of the partnership would remain unchanged. But Robert Dudley, its BP-appointed chief executive who fled Russia in July citing a campaign of harassment against him, would lose his job by the end of the year a move for which the Russian partners have aggressively campaigned.
The accord, details of which have still fully to be thrashed out, provides an option for an initial public offering, equally shared by each partner, of up to 20 per cent of a subsidiary of TNK-BP. This would meet a key demand of the Russian shareholders, who have pushed for a means to sell at least part of their stake in the joint venture for a full market value.
The new chief executive, envisioned to start by early next year, will be nominated by BP and approved by the board of TNK-BP, whose structure will change to end the current gridlock caused by having two sets of five members from each side. The new board will have 11 members, four from each side and three independents. The 14-person management committee will be more than halved.
The deal is critical to BP which has seen its shares suffer from the dispute. This is a much better outcome for BP than people had expected, said a senior oil industry executive.
He said the industry had expected BPs share in TNK-BP to shrink to about 25 per cent without full compensation. It gives both partners fair treatment, but the IPO details need to be fully disclosed before the deal can be properly analysed.
Another senior industry figure cautioned that a key test would be how independent the three new directors proved to be.
BP confirmed the discussions were in progress but declined to comment further.
The Russian shareholders oligarchs Mikhail Fridman, German Khan, Viktor Vekselberg and Len Blavatnik hold their stake through the Alfa-Access-Renova group. A spokesman for the group said it had no comment to make on any possible agreement.
They have denied any connection to the official inquiries and investigations targeting TNK-BP.
EDITORS CHOICE
Senior TNK-BP official resigns – Aug-25
Exiled TNK-BP head hits out – Aug-22
Lex: Russian expansion – Aug-15
Copyright The Financial Times Limited 2008
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
