BP's Dudley Says Appointment Won't Cause Issues for Russian TNK-BP Unit
Dudley will succeed Tony Hayward at BP’s top post from Oct. 1, the London-based company said today in a statement. Two years ago, Dudley, 54, was forced to leave Russia in a battle for control of the 50-50 venture with the billionaire shareholders.
“I sent Bob my congratulations today,” TNK-BP shareholder German Khan said.
Moscow-based TNK-BP accounts for about a quarter of BP’s production, a fifth of reserves and about a tenth of earnings. In 2008, TNK-BP’s partner AAR, a group of companies owned by Khan, Mikhail Fridman, Viktor Vekselberg and Len Blavatnik, called for Dudley’s ouster in a dispute over strategy at Russia’s third-biggest oil company, alleging he ignored their interests. Dudley denied the charge.
“I worked in Russia for five and a half years with TNK-BP and was part of building the company with” the Russian owners, Dudley said today on a conference call with reporters. “I left with the governance dispute, I’ve remained in contact with them, the relationships were very professional, I don’t expect that that cause any issues for us.”
BP plans to nominate Hayward as a non-executive director of TNK-BP, the U.K. producer said today. He will also remain on the BP board until Nov. 30.
“We also welcome the possibility that Tony Hayward will be named to the board of TNK-BP,” Khan said. “We think he’s highly qualified specialist and was the victim of a subjective situation.”
In 2008, workers seconded by BP were barred from working in Moscow, while the successor to the Soviet KGB raided its office and an employee was charged with industrial espionage. In the end, Dudley fled the country, citing “sustained harassment” amid court battles and labor and tax inspections.
“Sure we had some friction, but that friction wasn’t of a personal nature,” Khan said. “In those events that occurred there isn’t and wasn’t anything personal.”
Dudley continued to run TNK-BP from an undisclosed location, only stepping down as part of a settlement between the factions reached in September 2008. Dudley had been viewed as a possible contender to head BP before Hayward succeeded John Browne in 2007.
Hayward and Dudley will travel to Russia to meet government officials and business partners, given the country’s importance to the company, Vladimir Buyanov, a Moscow-based BP spokesman, said by telephone. The dates for the visit will be announced later, he said.
BP, which is accelerating as much as $30 billion of asset sales after the Gulf of Mexico oil spill, isn’t in talks with its partners on selling its stake in TNK-BP, Khan said. BP is selling assets over the next 18 months, reducing investment and cutting the dividend to pay the bills after the spill wiped 45 billion pounds ($70 billion) off the company’s market value.
BP reported a record net loss of $17.2 billion for the second quarter, after booking a pre-tax charge of $32.2 billion related to the spill, the worst in U.S. history leak.