BP bowed to demands from its partners in TNK-BP to ease its grip on Russia's third-largest oil producer to end a bitter dispute that had knocked BP's shares and rattled investor confidence in Russia.
TNK-BP's top management, including BP-nominated Chief Executive Bob Dudley, will be replaced, independent directors will be added to the board and the owners will consider floating 20 percent of the joint venture. BP shares rose 4 percent on news of the framework deal. BP and Alfa Access Renova (AAR), the vehicle that represents the four Russia-connected billionaires who own 50 percent of TNK-BP, said the deal would be finalised in the coming months.
"This would be a much better outcome for BP than the market has been anticipating," Richard Griffith at Evolution Securities said. Investors had feared that the hostile battle for control of TNK-BP might lead to BP losing interest in the joint venture, which analysts said was worth $45 billion, with only minimal compensation.
BP Chief Executive Tony Hayward said the terms agreed would protect BP's investment going forward, even though its effective management control over TNK-BP had been weakened.
"We've made some modest adjustments to give the company a little more freedom," BP Chief Executive Tony Hayward told Reuters in a telephone interview. "We think this provides the platform for the next phase in its (TNK-BP's) development and we look forward to continuing to grow," he added.
Hayward said he hoped the recent attacks on TNK-BP, including raids on its offices by security forces and tax probes, which had prompted Dudley to flee Russia citing a campaign of harassment, would now become less of a problem. Russia's deputy prime minister Igor Sechin, a close ally of Prime Minister Vladimir Putin and chairman of state-controlled Rosneft, was quoted in AAR 's statement as praising the partners for resolving their differences themselves.