BP, Russian partners locked in battle for control over TNK-BP

17 June 2008

Mumbai: British oil giant BP and its Russian partners are battling for control of their $40 billion equal joint venture, TNK-BP, Russia's third-largest oil producer and a key oil reserve for the international energy giant.

TNK-BP was set up as a 50-50 venture between BP and three Russian firms - Alfa Group, of which Fridman is chairman; Renova Group and Access Industries in 2003 with an investment of $7.5 billio from BP.

Russian tycoon Mikhail Fridman, one of the Russian partners, charged BP of stifling growth at TNK-BP by treating it as a subsidiary and demanded sweeping changes in management.

Fridman cited TNK-BP's dismal performance vis-a-vis other Russian energy companies and BP's rejection of 20 international projects on grounds that they would compete with other BP projects.

Fridman also threatened to file a suit in Russian court to stop TNK-BP's annual general meeting on 26 June and said he would try all ''legal means'' to dismiss TNK-BP's chief executive, Robert Dudley.

"Any other board would have dismissed its CEO a long time ago, and any other 50 per cent shareholder would have initiated legal action to ensure that directors perform their fiduciary responsibility," Fridman said. "We need foreign investors that will help ensure the growth of Russian companies, not constrain their development," he added.