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TNK-BP CEO leaves Russia, blames harassment

Moscow, July 25, 2008

The chief executive of BP's Russian venture TNK-BP left Russia on Thursday, blaming a campaign of harassment as a fight for control between BP and its partners hit a new peak.

"In the light of the uncertainties surrounding the status of my work visa and the sustained harassment of the company and myself I have decided to leave and to work outside Russia temporarily," chief executive Robert Dudley said in a statement.

Dudley has failed to renew his Russian visa as part of a bigger row between BP and its four Russian-connected billionaire partners over management control and strategy at Russia's third-largest oil producer.

The Russian shareholders have demanded Dudley resign, accusing him of poor performance and favoritism toward BP. BP has denied both charges, saying the Russian side is using illegal tactics to wrest control of the venture.

TNK-BP said Dudley would continue as CEO, and as president and chairman of the Management Board of TNK-BP Management, and has all requisite authority to continue to run the company.

"The company will continue to operate and trade as normal," the statement added.

BP CEO Tony Hayward said Dudley had been subjected to sustained attacks and pledged to continue supporting him.

"BP will use all means at its disposal, both inside and outside of Russia, to defend its interests and rights as a 50 percent shareholder in TNK-BP," Hayward said in a statement.

"This will include bringing arbitration proceedings against AAR to recover any and all losses suffered by BP as a result of their violations of the terms of our shareholder agreement," Hayward added. AAR stands for Alfa Access Renova, the umbrella group for BP's billionaire partners.

AAR chairman Stan Polovets told Reuters it would continue to demand Dudley be replaced. "We object to the fact that BP wants to run TNK-BP from London. It once again confirms that BP considers TNK-BP as its subsidiary, not as an independent Russian company," Polovets said by telephone.

"We insist on our demand for BP to present a new candidate for the position of TNK-BP's CEO."    

It was not immediately clear from where Dudley would run the joint venture. A BP spokesman said Dudley would not be working from BP's offices in London or elsewhere.

In Washington, Lord Robertson, TNK-BP's deputy chairman, said BP would fight to stay in Russia and fend off what he said was an effort by the Russian partners to seize control.

"We are not going to be driven out of a country by the actions of these four individuals," he said at the Nixon Center think tank. "We will fight and we are going to fight in all the legitimate courts in the world for the value that we have in this company and the importance of staying there as well."    

Earlier in the day, Deputy Prime Minister Igor Sechin, chairman of state-owned oil company Rosneft and a close ally of Prime Minister Vladimir Putin, again backed Dudley, who was appointed by BP in line with TNK-BP's shareholder agreement.

Asked whether Dudley should quit, Sechin replied: "I think that BP brings in new technology and transparency which positively influence the company's performance."    

Sechin reiterated his call for the shareholders to come to an agreement.

Dudley's visa was due to expire on Monday. Another Western senior executive, chief operating officer Tim Summers, may also face a hasty departure if his visa is not renewed by Monday.

Summers, speaking to reporters earlier in the day, declined to say whether the Russian side would take effective management control if the Western executives leave.

"We will cross that bridge when we come to it," he said. - Reuters




Tags: Oil | Russia | TNK-BP |

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