November 22, 2008

British and Russian partners come to terms on TNK-BP

RIA Novosti reported that BP and Russian shareholders at TNK-BP approved a deal recently to end their protracted dispute over the joint oil venture's management, including removal of CEO and appointment of independent executives.

According to the report, the British oil giant and the Alfa Access-Renova consortium of Russian billionaire shareholders signed a memorandum of understanding, which also includes an option to sell up to 20% of a TNK-BP subsidiary through an initial public offering on international financial markets. BP said in a statement the memorandum is due to be finalized in detail over the coming months.

Mr Peter Sutherland chairman of BP in the statement said that "It will create a stable base from which to grow the joint venture to the benefit of everyone involved, including the Russian state for which strong capital investment and continued technical innovation to boost declining oil output are important."

Mr Tony Hayward CEO of BP said that “The agreement as a sensible means of resolving a situation that could not continue without causing serious damage to what has been an immensely successful joint venture for all concerned."