Mikhail Fridman, chief executive officer of Russian-British joint venture TNK-BP, has resigned as the company’s CEO due to a collapse of corporate management, a source close to the company said on Monday.
TNK-BP said earlier on Monday that Fridman had informed the company’s board of directors of his resignation from the post. Fridman is a member of the AAR consortium, which represents the four billionaires of Russian origin who own half of TNK-BP.
“BP acts unconstructively and aggressively, it sends letters to [TNK-BP] managers saying they have no right to make any decisions without BP’s approval and threatens legal proceedings. Management is almost paralyzed. The head of the company cannot work under such circumstances,” the source close to AAR told Prime news agency.
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 culminated in the replacement of the former TNK-BP CEO Robert Dudley in 2008.
The conflict, which went on for three months, ended with Dudley resigning and leaving Russia.
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 letting the company expand abroad in areas where it might itself compete with BP.
The conflict flared up again in January 2011 when AAR blocked a $16 billion deal between BP and Russian oil giant Rosneft to jointly develop Russia’s Arctic shelf. The AAR partners insisted TNK-BP’s shareholder agreement compelled BP to offer any Russian project to TNK-BP first. The Rosneft deal, which was supposed to replenish BP’s reserves, flopped.
The AAR source considers the roots of the current management collapse stem from the failed deal with Rosneft.
“Relations between the shareholders were constructive [till the deal with Rosneft]. After that, two of three independent directors left the board … so the board lost its quorum. The company will be unable to pay dividends until the corporate system will be restored to its former condition,” the source added.
BP declined to say if there could be any legal proceedings against the TNK-BP managers, but said the British company had done its best to restore the management structure in TNK-BP and would search for Fridman’s successor.
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.