Chief executive of BP's Russian joint venture faces pressure from oligarchs to step down

Click to follow
The Independent Online

Speculation was growing last night that the chief executive of BP's Russian subsidiary could step down after he admitted publicly for the first time to "differences" between him and the oligarchs with whom the oil major shares ownership of the venture.

Robert Dudley, the chief executive of TNK-BP, admitted that he had disagreements with shareholders over where billions of dollars of investment should be directed and over prospective asset sales. The revelation of strained relations comes on the heels of at least two separate raids on the group's offices in Russia and a lawsuit filed by a firm run by executives who used to work at companies in the Alpha Group, the investment group owned by Mikhail Fridman, one of the three oligarchs who owns TNK-BP with BP.

Mr Dudley's comments, in a lengthy interview with the Russian newspaper Vedomosti, added further fuel to the fire amid growing fears that BP may be forced to accept the entrance of Gazprom, the state-owned gas giant, as a major new shareholder. TNK-BP is Russia's third largest oil producer and accounts for a nearly a quarter of BP's global production. It is the only major oil-producer in which the Kremlin does not hold a major stake. BP owns half of the company, while the rest is split between Mr Fridman, Viktor Vekselberg and Len Blavatnik.

Another Russian paper, Kommersant, suggested that Mr Fridman and Viktor Vekselberg told BP's chief executive, Tony Hayward, earlier this month that they wanted Mr Dudley to be removed and replaced by Mr Vekselberg. The speculation prompted a statement of unconditional support for Mr Dudley. It said: "BP fully supports Bob Dudley's position as president and chief executive of TNK-BP. Mr Dudley is a highly experienced and outstanding industry executive who has consistently managed the business in the interests of all its shareholders and BP has absolute confidence in him."

BP warned earlier this month that it could be forced to cut production due to three lawsuits that have been filed by Tetlis, a small Moscow brokerage. The firm argues that the $120m (£60m) BP pays annually to 148 secondees is an unwarranted expense that hurts the interests of other TNK-BP shareholders.

The high-level executives can not return to work until the cases are resolved. Mr Dudley, an American who came to BP when it merged with Amoco in 1999, has been chief executive of TNK-BP since it was formed in 2003. The post has no fixed term.