The resignation of Mikhail Fridman as the chief executive officer of the Russian-British joint venture, TNK-BP, means that the company’s parity ownership has “outlived its usefulness” and should be changed, according to Stan Polovets, head of AAR, speaking late on Wednesday.
AAR, which stands for the Alfa-Access-Renova consortium and represents Russian magnates including Fridman, German Khan and Viktor Vekselberg, and shares 50 percent ownership of TNK-BP with the British based global oil producer, is also ready to buy out its British counterparty.
“AAR is ready to buy BP’s stake in TNK-BP. As an alternative variant, we are ready to exchange [our stake in TNK-BP] for BP shares so AAR would become BP’s shareholder,” Polovets told Russia Today international news TV channel.
TNK-BP said earlier on Monday that Fridman had informed the company’s board of directors of his resignation from the post.
A source close to AAR told Prime news agency on Monday that Fridman resigned due to the collapse of corporate management.
“One thing is clear – the 50/50 ownership scheme outlived its usefulness and it is time to revise the ownership structure. We are ready to discuss [the mentioned schemes] with BP,” Polovets added.
BP and the Russian partners in the AAR consortium have been locked in a long-running dispute over management of their Russian joint venture, which included the replacement of the former TNK-BP CEO Robert Dudley in 2008. That conflict, which went on for three months, and ended with Dudley resigning and leaving Russia, was followed by another divide over whether BP was entitled to participate in a joint venture with Russia’s biggest crude producer, Rosneft, to explore and develop Russia’s Arctic shelf deposits.
In January 2011 AAR blocked the proposed $16 billion deal between BP and Rosneft to create a joint venture, as well as to swap shares in each other. The AAR partners insisted TNK-BP’s shareholder agreement compelled BP to offer any Russian project to TNK-BP first, Rosneft was disinclined to having TNK-BP, as opposed to BP, as a partner, and the deal collapsed after failed arbitration.
The two sides disagreed over the management of TNK-BP, with AAR accusing BP of treating TNK-BP merely as a Russian subsidiary to boost its reserves, and not allowing TNK-BP to expand abroad in areas where it might compete with BP.
The AAR source considered the roots of the current management collapse stem from the failed deal with Rosneft. The other members of the AAR consortium, German Khan and Viktor Vekselberg, remain with the business as executive directors and members of the management board.
Fridman told Kommersant business daily on Thursday that a third shareholder could come into the joint venture but did not elaborate.