BP, Russian partners to restructure TNK-BP; plan 20 per cent share float

04 September 2008

Mumbai: British oil giant BP and its partners in the Russian joint venture TNK-BP have finally agreed to restructure the management of the Russian oil venture, ending months of uncertainty and allowing for flotation of up to 20 per cent of the company's capital.

While the two partners would continue to hold 50 per cent stake each in the joint venture, Russia's third-largest oil producer, the 20 per cent initial public offer would also be equally shared.

BP has also agreed to a number of other Russian demands, including the removal of TNK-BP's chief executive Bob Dudley and the appointment of independent directors.

Dudley, who was denied a visa by the Russian government after his term expired, is currently managing the company from overseas after he left Russia in July citing harassment. (See: Russian authorities refuse work permit for TNK-BP's expatriate executives)

A Moscow court has banned him from working in the country for two years.

BP, which held 50 per cent of the joint venture stake, however, held more authority in the appointment of the chief executive and technical staff, which the Russian partners had objected to.