TNK-BP ends year without the Arctic, a CEO and 2 directors, but with assets abroad
MOSCOW. Dec 27 (Interfax) - Oil company TNK-BP spent all of 2011 embroiled in a shareholder dispute, the highlights of which occurred in the first and last months of the year.
The partners in TNK-BP - Britain's BP and the Russian consortium Alfa-Access-Renova (AAR) - coexisted peacefully for nearly two years. After the memorable scandal of 2008 over the removal of company president Robert Dudley, who is now head of BP, and the battle for operational control at TNK-BP, now held by AAR, the partners returned to peaceful division of dividends and discussions about their joint venture's international expansion.
However, in January 2011 BP made a fateful mistake by making a deal with state oil major Rosneft on work in the Arctic and an exchange of shares, bypassing its Russian partners in TNK-BP and thus violating the company's shareholder agreement.
This deeply offended AAR, which represents the interests of businessmen Mikhail Fridman, German Khan, Alexei Kuzmichev, Viktor Vekselberg and Leonard Blavatnik. As compensation for moral damages, the consortium wanted TNK-BP to be included in the Arctic project and itself take part in the exchange of shares between Rosneft and BP. But they were unable to reach an agreement and the BP - Rosneft deal fell apart.
However, rumors resumed about the sale of someone's stake in TNK-BP. The media initially reported that BP had begun preparations to possibly sell its stake in TNK-BP to Rosneft, and AAR responded through the media that it would oppose such a sale. There were reports that BP would buy off AAR with cash and a stake in a Canadian project. Moreover, BP and Rosneft together were prepared to pay AAR $32 billion for the stake in TNK-BP.
The partners then moved their spat to the courts. The Stockholm Arbitration Tribunal is now considering countersuits filed by AAR and BP, while minority shareholders of TNK-BP Holding have filed lawsuits in Tyumen seeking, so far unsuccessfully, $13.6 billion in damages from board directors representing BP at TBH. There has been speculation that AAR is behind the minority shareholders, and is thus trying to put pressure on BP.
Nonetheless, TNK-BP's main achievement in 2011 was its entry into the international market, with the purchase from BP of assets in Venezuela and Vietnam. A deal with HRT in Brazil is about to be closed. Despite the distraction of the shareholder disputes, the company is striving to become global. TNK-BP's management, which saw some changes in 2011 but is immune to the constant disputes between the shareholders, continues to increase production and improve the company's efficiency.
Only Maxim Barsky, the would-be symbol of cooperation between AAR and BP, lost patience. The shareholders promised to make him head of TNK-BP this year. Barsky waited for as long as he could but eventually left the company in frustration.
Another symbol of agreement between BP and AAR - independent directors on the board of TNK-BP - also let the partners down. Unwilling to bear the burden of the decisions that independent directors would have to make amid the dispute, former German Chancellor Gerhard Schroeder and former Rio Tinto chairman James Leng stepped down in December.
Now TNK-BP's shareholders must scramble to resolve the issue of the legitimacy of the board of directors without two of its members. In addition, they must find decisive people willing to put up with the pressures of the standoff between AAR and BP.
And wait and see what new developments the shareholder dispute at TNK-BP will bring in 2012.