From Russia without love

Tensions continue to run high at TNK-BP, as AAR cranks up the pressure on CEO Robert Dudley...

by
Last Updated: 31 Aug 2010

In the latest twist in an increasingly bitter saga, BP’s Russian partners have denied that they’re trying to force the oil giant out of the country – but are continuing their hostile campaign against Robert Dudley, the CEO of joint venture TNK-BP. After weeks of pressure from the Russian authorities, Dudley was forced to flee the country last week over ‘visa difficulties’, and is now apparently holed up at a secret high-security command centre somewhere in Europe…

Sounds a bit melodramatic? Not when you look at how this story has developed in recent weeks. All kinds of claims and counter-claims have been flying back and forth between BP and AAR, its joint venture partner. The four oligarchs who control AAR say BP has been running the venture like a subsidiary and want Dudley out; BP says that the recent string of investigations and sudden visa problems are part of a concerted campaign to force the oil giant out of the country – and deliver control of the group into Russian hands. Last week Dudley said that ‘sustained harassment’ by the Russian authorities had forced him to leave.

TNK-BP is trying to put the best spin they can on it, suggesting that: ‘Mr Dudley fully retains his powers as CEO. He hasn't stepped down, he's just left Russia.’ But the oligarchs beg to differ: although they denied the harassment claims and suggestions they were preparing a lawsuit against Dudley (and thus argued that the secret command centre stuff is just melodramatic posturing), they’re now saying that they no longer recognise him as the chief executive. In fact, they want BP to get rid of the entire senior management: they insist that they’re not trying to force the oil giant out, but they want BP to replace Dudley with an ‘independent’ who’ll run TNK-BP in both BP's and AAR's interests.

BP’s stake in TNK-BP earned them an impressive £2.35bn in the first half of this year, so it’s no surprise that they’re seeking legal advice about a possible arbitration case. Although legal action could result in the seizure of assets held in the West by the four oligarchs - which will certainly ratchet up the corporate and political tension even further. However this one plays out, given our new oil anxiety and the ever-worsening diplomatic relations between Britain and Russia, someone’s going to be left with a sour taste in the mouth that no amount of Beluga caviar will remove...


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