Oligarch leader of BP’s Russian venture quits
THE BILLIONAIRE head of BP’s partner in Russia resigned yesterday, putting the oil giant’s relationship with TNK-BP under further strain.
Mikhail Fridman, the chief executive of TNK-BP and a key investor, will stand down at the end of June for personal reasons, the firm said.
But sources close to Alfa-Access-Renova (AAR), the group of oligarchs including Friedman who own 50 per cent of TNK-BP, said his departure was a sign of deteriorating relations between the two investors.
“The AAR consortium has lost confidence in BP as a partner. The status quo cannot continue,” the source told Reuters.
While BP played down Fridman’s role at TNK-BP, saying he had been a “ceremonial” leader, the Russian billionaire has loomed large in many run-ins with BP management.
AAR managed to scupper BP’s ambitions in Russia last year by bringing legal action to halt its planned £10bn share swap and exploration deal with Rosneft.
The two sides are still in arbitration over whether the failed BP-Rosneft deal violated an exclusivity clause in the TNK-BP shareholder agreement, with further hearings expected towards the end of this year.
But hopes that Fridman’s departure marks an end to boardroom hostilities are likely to be premature. “As long as he owns it, he will de facto run it,” said a well-placed source in Moscow energy circles.
“This is just a way to formally disassociate himself from the management. Looks like preparing the ship for a storm.”
His resignation creates another big hole in TNK-BP’s board, after it lost two independent directors at the end of last year. The firm cannot pay out a dividend while its board is inquorate – costing both BP and AAR dearly.
The firm did not comment on whether Maxim Barsky, a favourite of AAR who left TNK-BP last year but has long been touted as Fridman’s successor, could rejoin the firm.
TIMELINE | BP’S FRAUGHT RELATIONSHIP WITH ITS RUSSIAN PARTNERS
February 2003
BP establishes $7bn Russian joint venture with AAR, named TNK-BP. Mikhail Fridman, one of the four oligarchs that make up AAR, is one of the founders.
March 2008
Russian police raid the offices of BP and TNK-BP in Moscow, prompting speculation that the Kremlin wants to buy out the Russian billionaires. The dispute forces Bob Dudley, then TNK-BP chief executive, to flee Russia.
January 2009
BP agrees to cede some influence to AAR to end a boardroom dispute.
May 2009
Acrimony flares up again as AAR puts up its own candidate, Maxim Barsky, to replace Fridman as chief executive. Fridman is later kept on for at least two more years.
January 2011
BP unveils historic £10bn deal with Russian oil firm Rosneft to explore the Arctic. AAR starts injunction proceedings, arguing TNK-BP should have been given first refusal for BP’s activities in Russia.
May 2011
Rosneft deal flops as BP fails to convince AAR to drop its injunction. Exxon then swoops in to take BP’s place.
Summer 2011
Ongoing arbitration hearings between BP and AAR begin. BP denies rumours it plans to sell its TNK-BP stake.