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5 Sep, 2008 06:19

AAR’s Polovets hails TNK-BP agreement

Stan Polovets, CEO of the AAR consortium which represents the Russian shareholders in TNK-BP, has hailed the agreement signed on Thursday between BP and AAR on the future management of the Russian-British oil major.

Speaking to Business Today, Polovets acknowledged that negotiations leading up to the agreement had been complicated and needed both sides to allow emotions to subside.  It had taken some time for AAR to bring around BP to the view that TNK-BP should be structured to run as an independent oil company, with international projects, an independent CEO, and more independent directors on the board.

He disclosed that, after the agreement, an international recruitment firm would now begin the process of developing a shortlist of potential candidates for the position of CEO, and that one of these would be nominated by BP for AAR nominees to TNK-BP’s board and AAR to approve.

The Board of TNK-BP would also be strengthened by the addition of new independent directors, who would be appointed on the basis of their capacity to add value and expertise to the oil major.  These would be chosen from a shortlist of ten which would also be identified by an international recruitment firm. 

Responding to questions about any involvement of the Russian government in the agreement, in the wake of comments by government figures and BP Chairman Peter Sutherland, Polovets noted that TNK-BP would remain a private company.  He added that the government had refused to become involved in the dispute between BP and AAR over TNK-BP, but had an interest in a resolution of the dispute because of the size of the company and the potential implications of the dispute for the perception of Russia’s business climate. 

When asked about a possible IPO of TNK-BP Polovets said that the dispute and changes to both the executive and board would mean that it would probably be a year or two away.  He added that over the coming year he expected TNK-BP perform better than it had in the past, and that the company would be on a path rapid and dynamic growth which would encourage greater interest in the company on the part of investors.  He emphasized that the company was not committed to an IPO but that the new CEO, who would have expanded powers and would have the capacity to initiate large projects and international expansion, will be able to recommend to the board that an IPO be initiated.  If the CEO recommended this to the board, and the board approved this, then it would proceed.