Energy venture ends power struggle

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By Catrina Stewart ASSOCIATED PRESS

MOSCOW | BP PLC and its billionaire Russian partners in the joint venture TNK-BP have agreed on a deal that forces out its embattled chief executive officer and signals an end to a bitter struggle for control of the Russian-British company, officials said Thursday.

Under the deal, TNK-BP CEO Robert Dudley, a U.S. citizen who has been running the company from abroad since leaving Russia in July, will step down by the end of the year.

That has been a key demand of the Russian shareholder consortium AAR, which owns 50 percent of the venture. The consortium comprises Alfa Group's Mikhail Fridman and German Khan, Renova's Viktor Vekselberg and Access Group's Len Blavatnik.

BP will nominate a new, independent CEO, who must be approved by the TNK-BP board, according to both BP and AAR officials.

The deal ends an acrimonious and very public fight that has battered Russia's image among investors. It has also contributed to a downgrade of BP's credit rating amid fears that the British oil company would lose control of the venture, perhaps ceding part of its stake to a Russian state-controlled company.

Under the deal, BP will keep its 50 percent stake in the venture, which supplies one-quarter of BP's oil and gas production.

BP CEO Tony Hayward described the agreement as "a sensible means of resolving a situation that could not continue without causing serious damage to what has been an immensely successful joint venture for all concerned."

"I now look forward to a fruitful conclusion of negotiations so that we can rebuild trust with AAR and resume our record of success for the benefit of all parties," Mr. Hayward said. "A transparent, responsible approach to governance will be a critical factor in the appeal of TNK-BP to potential future investors."