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BP and AAR Sign Deal To Align
Interests and Boost Value of Russian Joint Venture
BP announced today that the deal agreed in principle last September to revise
the shareholder agreement with its Russian partners in TNK-BP has now been
finalised, paving the way for the next phase in the development of Russia's
third largest oil and gas company and, in recent years, one of its most
successful.
The revised agreement is aimed at
improving the balance of interests between the company's 50:50 owners, BP and
Alfa Access-Renova (AAR), and focusing the business more explicitly on value
growth.
Changes include governance adjustments such as replacing the current
evenly-balanced main board structure with four representatives each from BP
and AAR plus three independent directors agreed by both sides. Unanimous
board support will be required for certain matters, including substantial
acquisitions, divestments and contracts, and projects outside the business
plan, together with approval of key changes to the TNK-BP group's financial
framework and of related party transactions. BP will continue to nominate the
chief executive, subject to main board approval, and AAR will continue to
appoint the chairman. The new board members are expected to be announced
shortly.
Following Robert Dudley's recent resignation, a new CEO is also expected to
be announced in the coming weeks. The new CEO, who is required to have
substantial Russian work experience and Russian language proficiency, will
head a new management board initially comprising the CEO, the chief operating
officer, the chief financial officer and three executive directors - a
significantly smaller management team than in the past.
The parties also agreed to revise the charters of
significant TNK-BP group subsidiaries so that they will have BP- and
AAR-appointed directors on their boards and, in some cases, will also have an
independent director to avoid deadlock on certain matters. These significant
subsidiaries account for a substantial part of the TNK-BP group's value and
include TNK-BP Holding, the TNK-BP group's principal holding company in
Russia.
Underpinning the new agreement and demonstrating the commitment to build on
the success of TNK-BP, the shareholders have also resolved, or have agreed a
process for resolving, all outstanding claims between them, including those
relating to Russian back taxes. The suit filed in Russia by a minority
shareholder in TNK-BP Holding, alleging that an agreement for BP specialists
to provide services to the TNK-BP group is invalid, has been withdrawn.
The parties have reiterated their agreement to a potential future sale of up
to 20 per cent of a subsidiary of TNK-BP through an initial public offering
(IPO) at an appropriate future point, subject to certain conditions and the
consent of the Russian authorities.
Notes
to Editors:
TNK-BP
posted record profits of $4.7 billion in the first half of 2008 - more than
double the $2.1 billion for the same period in 2007.
Revenues totalled $28.3 billion in the first half of 2008, compared with $17
billion in the first half of 2007.
Oil production in the first half of 2008 averaged 1.6 million barrels a day.
TNK-BP has more than replaced reserves each year since it was formed in
August 2003.
Further
enquiries:
BP Press Office, London: +44 (0)20 7496 4076
BP Russia, Moscow: +7495 363 6262
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